Lee Shih and Peyton Teo complete this three-part series on key trends in judicial management in Malaysia.
We complete the final part on the trilogy on trends in judicial management (JM) cases in Malaysia. This article covers the making of the JM Order, the opposition to the judicial manager candidate, and issues post the JM Order.
Lee Shih and Peyton Teo continue with key trends in judicial management in Malaysia.
We continue with Part 2 of a three-part series on the key trends in judicial management (JM) cases in Malaysia.
In Part 1, we had covered the reported cases on JM, the debtor and creditor applicants for JM, a Labuan company applying for JM, public listed companies, and the need for full and frank disclosure.
We continue with other issues arising from Malaysia’s JM cases.
Lee Shih and Peyton Teo summarise some key trends in judicial management in Malaysia.
Judicial management (JM) is part of Malaysia’s corporate rescue mechanisms that came into force on 1 March 2018. Three years on, we set out the JM trends in our three-parter series of articles.
JM is a court-supervised rescue mechanism aimed at rehabilitating financially distressed companies. A court-appointed insolvency practitioner is empowered to manage the distressed company’s affairs, business and property. This insolvency practitioner is known as a judicial manager.
Once appointed, the judicial manager would prepare and table a statement of proposal for the creditors to vote on. The purpose of this is to either resuscitate the company and to continue as a going concern or alternatively, work towards a more advantageous realisation of the company’s assets than in a winding up for the benefit of its creditors.
The filing of a JM application triggers an automatic moratorium on all legal proceedings against the company. This gives breathing space to a financially distressed company to focus on its restructuring efforts to pivot back towards financial viability.
The High Court in Dato’ Shun Leong Kwong & Anor v Menang Corporation (M) Bhd & Ors [2021] MLJU 870 (grounds of judgment dated 21 May 2021) dealt with, among others, the issue of whether the company could suspend its directors. The Court also addressed issues relating to Board meetings and the requisition of the members’ meeting.
The High Court in the oppression action of Chuah Seong Keat and 3 others, or otherwise referred to as the Thai Odyssey case, allowed the striking out of certain reliefs from a shareholder oppression action. The Court found that those reliefs were claims under trademarks and domain name and fell outside the oppression relief. You can access the full Grounds of Judgment dated 12 May 2021 and also reported at Chuah Seong Keat & Ors [2021] MLJU 843.
Continue reading
The High Court in the decision of Top Builders Capital Berhad and two others [2021] 10 MLJ 327 (grounds of judgment dated 30 April 2021) set out certain important principles on scheme of arrangement law. The decision dived deep into issues on assessing the proof of debt for the creditors’ vote in a scheme and how to obtain leave to proceed against a restraining order.
