S210(1) of the Companies Act allows the Court to order a meeting between a company and its creditors to consider compromises or arrangements. In Re Sembawang Engineers and Constructors Pte Ltd [2015] SGHC 20, the Singapore High Court granted an application by Sembawang Engineers and Constructors Pte Ltd (the “Company”) for a s210(1) order. The applicant Company was successfully represented by Patrick Ang, Low Poh Ling and Chew Xiang from Rajah & Tann Singapore LLP.

A scheme of arrangement is an important avenue for a company under financial stress to compromise debts owed to specified categories of creditors. In broad terms, there are four steps to a scheme. The first step is to determine which creditors are to be covered under the scheme, categorize them, and to seek leave from the High Court to convene a meeting of each category of creditors. The second step is to hold and pass the appropriate resolutions at the meeting(s) of creditors. The third step is to obtain the sanction of the High Court of the scheme.

In the latest decision in Kao Chai-Chau Linda v Fong Wai Lyn Carolyn and others [2015] SGHC 260, the Singapore courts have taken another step toward controlling the costs involved in insolvency and restructuring situations. In Kao, an application was made to the Singapore High Court to tax the fees of court-appointed receivers and managers. The application was heard before the learned Justice Steven Chong.

Introduction

The fees charged by insolvency practitioners can sometimes be a matter of contention, with different interested parties having differing expectations. Further, there is no comprehensive set of guidelines or regulations in Singapore setting out the basis on which insolvency practitioners should determine their fees, as well as the level of information on fees that should be provided to stakeholders. This sometimes leads to unhappiness as to the quantum and necessity of fees after the event.

The Defendant served 2 payment claims on the Plaintiff for work done up to end of November 2014 in the month of December 2014. It was common ground that the revised payment claim served on 26 December 2014 (“PC3R”), replaced the earlier payment claim dated 5 December 2014. • The Defendant then served a third payment claim (“PC4”) in the same payment claim period, i.e., on 30 December 2014, this time for work done up to end of December 2014. • PC3R was not withdrawn by the Defendant.

CASE UPDATE 11 November 2015 PROPOSED SYSTEM OF COSTS SCHEDULING FOR INSOLVENCY PRACTITIONERS Kao Chai-Chau Linda v Fong Wai Lyn Carolyn and others [2015] SGHC 260 INTRODUCTION This case concerns the quantum of professional fees reflected in a bill of costs issued by the receivers and managers (“R&Ms”) of Airtrust (Singapore) Pte Ltd (“Airtrust”).

Introduction

A statutory demand is an important step in the bankruptcy process, as it allows the creditor to initiate a bankruptcy application against the debtor. It is thus vital that any statutory demand issued must conform to the legislative requirements. In the recent case of Ramesh Mohandas Nagrani v United Overseas Bank Ltd [2015] SGHC 266, the Singapore High Court had to decide whether to set aside a statutory demand based on alleged irregularities in its contents, and touched on what makes a statutory demand invalid.

Financial difficulties are not uncommon in the course of a business’ lifespan, and though there may be the threat of insolvency, there are a number of alternative avenues through which a company may stave off winding up proceedings. In Re Conchubar Aromatics Ltd [2015] SGHC 322, the Singapore High Court examined restraint orders against insolvency proceedings under s210 of the Companies Act, which deals with schemes of arrangement.

S210 prescribes a series of stages for the implementation of schemes of arrangement, including the following:

On 14 July 2015, the Bankruptcy (Amendment) Bill 2015 (the “Bill”) was passed in Parliament. It is not yet in force. The Bill will amend the Bankruptcy Act to create a more rehabilitative regime for bankrupts and ensure better utilisation of public resources.

When the Bill comes into force, it will effect the following changes to the Bankruptcy Act:

Introduction