Introduction
The questions of who has priority over a bankrupt's assets and precisely when the priority arises are important ones in bankruptcy. For judgment creditors who have already taken steps towards enforcement, the answer affects whether they will have prior rights to the bankrupt's property, ahead of the bankrupt's other creditors.
Introduction
When a company is being wound up or is in judicial management, the Court may – upon the application of the liquidator, the judicial manager, or a creditor – order the production of documents or information relating to the company, as well as the attendance of the company's officers and the people holding the relevant books and records. This facilitates the obtaining of documents or information for the purpose of determining the reasons for the company's demise.
Introduction
On 5 October 2022, the UK Supreme Court delivered its long-awaited judgment in BTI 2014 LLC v. Sequana SA and others [2022] UKSC 25 ("Sequana Case") which concerns the question of the trigger point when directors must have regard to the interests of creditors ("Creditor Duty"). This case raised questions of considerable importance for Malaysian company law.
Introduction
Businesses are increasingly spreading their footprint across jurisdictions, be it through the diversified locations of their assets or operations. What this means is that, if and when the need to resolve financial distress arises, such businesses may need to select a forum that will serve as an effective base for the management of the cross-border legal issues.
Introduction
When a company commences winding-up, the disposition of its property and the transfer of shares in the company is void, unless the Court otherwise orders. Under what conditions will the Court allow such disposition or transfer? This was the question in Ong Boon Chuan v Tong Guan Food Products Pte Ltd [2022] SGHC 181, when the Singapore High Court was faced with an application for the sale and transfer of shares in an insolvent company ("Company").
Introduction
Under the Insolvency, Restructuring and Dissolution Act 2018, the Court may order the winding up of a company on a number of grounds, including where the company is unable to pay its debts. In Energy Resource Investment Pte Ltd v International Golf Resorts Pte Ltd [2022] SGHC 134, the Singapore High Court was faced with such a winding up application, and set out the relevant considerations for establishing insolvency on this ground, as well as how such insolvency may be refuted.
Introduction
Introduction
The success of a scheme of arrangement in restructuring depends largely on the consent of the requisite statutory majority of the scheme creditors. To incentivise the creditors to commit to the proposal at an early stage, scheme companies may seek to enter into a lock-up agreement with the creditor, in which the creditor provides an undertaking to vote in favour of the scheme in exchange for certain benefits, such as consent fees.
What's this Update about?
In the recent decision of the Malaysian High Court in Re Top Builders Capital Bhd & Ors [2022] MLJU 1 ("Top Builders"), Ong Chee Kwan JC reaffirmed certain principles for the sanction of a scheme of arrangement ("SOA") and also decided on some novel issues:-
Introduction
Debtor's bankruptcy applications may be seen as being less common than creditors' bankruptcy applications. The law regarding the conduct of debtor's bankruptcy applications, including the relevant tests and the burden of proof, is thus less often explored. In Re Then Feng [2022] SGHCR 1, the Singapore High Court provided guidance in this regard.