bankruptcy

5 Key Reliefs in Malaysia’s Covid-19 Bill: Better Late than Never?

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[Update: On 23 October 2020, Malaysia brought into force its COVID-19 Act, with the full name Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020.]

Malaysia has tabled its Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Bill (Covid-19 Bill) in Parliament. The Bill states that it will have retrospective effect from 18 March 2020. This Covid-19 Bill and the eventual Act may alleviate some of the contractual and other issues that arose from the COVID-19 pandemic and Malaysia’s movement control restrictions.

However, with this Bill only being passed sometime in August 2020, is this a case of too little, too late?  We will have to see whether Malaysia’s Covid-19 Bill can help businesses and companies.

I touch on five key areas in the Covid-19 Bill.

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Webinar: COVID-19 – Restructuring Options and Risks for Businesses

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As part of the ongoing CLJ Law webinar series, I will be speaking on Monday 13 April 2020 at 3pm. I will highlight the key restructuring and rescue options for businesses (both companies and for individuals), and also the potential risks for directors as the companies take on more debt during this COVID-19 period.

[Edit: The session filled up its 100 spots within an hour of registration opening. I am now discussing with CLJ Law whether a second session can be held. ]

This is a free webinar but requires prior registration and limited to only 100 pax. You can click to register here.

Coronavirus: Restructuring and Insolvency for Businesses

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The coronavirus pandemic gives rise to the major risk of companies and small businesses going insolvent. In this article, I set out the restructuring and corporate rescue options for businesses in Malaysia. For example, companies can pursue the corporate rescue mechanisms under the Companies Act 2016. For small businesses who are sole proprietors, they may face bankruptcy. These individuals consider the voluntary arrangement under the Insolvency Act 1967.

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Case Update: Court of Appeal Clarifies Leave for Bankruptcy against Guarantors under the Insolvency Act 1967

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The Court of Appeal decision in Hong Leong Bank Berhad v Ong Moon Huat [2018] 1 LNS 1612 has clarified two important points under the new Insolvency Act 1967 on bankruptcy actions against guarantors.

The first issue is to clarify the protection for guarantors where all modes of execution and enforcement must be first exhausted against the principal debtor alone. The second issue is that when seeking leave to proceed against the guarantor, the judgment creditor can apply for leave to proceed either upon the issuance of the bankruptcy notice or even prior to that, up to and immediately prior to the filing of a creditor’s petition. Continue reading →

Bankruptcy and Directors: Vacating Seat and Potential Illegality

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There can be legal repercussions to a company when one of its directors is adjudged bankrupt. It is common in the constitution or articles of association to provide that the office of the director will become vacant if the director becomes bankrupt. I set out below three interesting legal issues that arise from bankruptcy and directors.

First, I will deal with the potential adverse impact of bankruptcy on directors’ resolutions and legal proceedings. This in light of the recent Court of Appeal decision in Sazean Engineering & Construction Sdn Bhd v Bumi Bersatu Resources Sdn Bhd [2018] 5 AMR 443; [2018] MLJU 839. This decision was under the Companies Act 1965 (CA 1965). Secondly, I interpret these issues in light of the Companies Act 2016 (CA 2016). Thirdly, potential ways to overcome such arguments. Continue reading →

Bankruptcy Law Seminar: The New Insolvency Act 1967

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Legal Logic Asia is holding its Bankruptcy Law Seminar: Impact and Compliance of the New Insolvency Act 1967 & Insolvency Rules 2017. This is on 19 December 2017 at Concorde Hotel. This will be a comprehensive one-day seminar covering all of the major changes now rolled out under the renamed Insolvency Act 1967.

Judging from the questions I have seen posted on this website, as well as uncertainties in practice, I recommend you to consider attending this seminar. Here is the brochure for the Bankruptcy Law Seminar: Impact and Compliance of the New Insolvency Act 1967 & Insolvency Rules 2017. Continue reading →