Introduction
Introduction
Background
In SME Care Pte Ltd v Jannie Chan Siew Lee [2025] SGHC 27, the Singapore High Court ("Court") held a bankrupt ex-director of a company personally liable to the company for failing to take steps to recover sums owed by third parties to the company.
Introduction
A trustee-manager, in the context of a business trust, actively runs the trust's operations while safeguarding the interests of investors. In the course of acting as a trustee-manager, the entity may incur liabilities in relation to activities of the business trust. How are these liabilities treated in a restructuring and insolvency? And can a trustee-manager propose a scheme of arrangement for debts incurred in its capacity as trustee-manager?
When a company goes into liquidation, creditors often wonder whether they will recover their debts. One available option to achieve this is funding legal action to help the liquidator recover assets.
Singapore's insolvency legislation allows creditors who fund liquidators' recovery actions to have priority over other creditors in the distribution of recovered assets. This improves the viability of commencing insolvency proceedings as an asset recovery tool.
Introduction
Insolvency and arbitration traditionally do not mix well, as they embody somewhat contrasting legal policies. The Singapore Court of Appeal highlighted in Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) [2011] 3 SLR 414 that:
Introduction
When a company enters liquidation, the appointed liquidator steps into a pivotal role – one that requires navigating complex challenges to recover assets and maximize returns for creditors. This task entails conducting detailed investigations and pursuing legal actions, processes that demand a careful balance of inquiry, judgment, and responsibility.
Inter-Pacific Petroleum Pte Ltd (in liquidation) v Goh Jin Hian [2024] SGHC 178
In what could be seen as a wake-up call, the High Court of Singapore clarified the scope of director’s duties in Singapore, emphasizing the minimum standard of care required.
Background