For those involved in the restructuring and insolvency field, I thought it would be useful to set out all the relevant provisions, subsidiary legislation and documents for the corporate rescue mechanism in Malaysia. Corporate rescue under the Companies Act 2016 is corporate voluntary arrangement and judicial management.
The High Court case of Re Leadmont Development Sdn Bhd  MLJU 1320;  1 LNS 1420 is the first decision on judicial management in Malaysia.
Judicial management orders were granted ex parte for two related companies, Leadmont Development Sdn Bhd (“Leadmont”) and its subsidiary Sierra Delima Sdn Bhd (“Sierra Delima”). The judicial management orders were to facilitate the rehabilitation of these two companies. The companies wanted to successfully complete their project, the Selayang StarCity Project. A secured creditor of the companies, Infra Segi Sdn Bhd (“Infra Segi”), intervened after the grant of the judicial management orders to set aside the orders.
The decision is important for setting out the background and statutory framework of the judicial management provisions in Malaysia. It spells out the test for the grant of a judicial management order. The Court ultimately exercised its inherent jurisdiction to set aside the earlier judicial management orders. Continue reading
On 20 April 2018, I will be speaking at the Legal Logic Asia talk on The Companies Act 2016: Post Implementation Challenges, New Corporate Rescue Mechanism Rules 2018 & Malaysian Code of Corporate Governance.
My co-speaker, Kenneth Foo, and I designed the course contents and the programme should be very enriching for the audience. We will using practical examples and real-life case studies to flesh out the issues we have come across. You can access the registration form here and with an early bird rate of RM800 if you sign up by 13 April 2018.
By the gazetting of the notice P.U. (B) 106/2018 dated 27 February 2018, the corporate rescue mechanism under Division 8 Part III of the Companies Act 2016 has come into force on 1 March 2018. The corporate rescue mechanism allows for financially distressed companies to consider two options: (1) corporate voluntary arrangement and (2) judicial management.
I set out only some brief key features of these two mechanisms. Along with the coming into force of the corporate rescue mechanism provisions, the new Companies (Corporate Rescue Mechanism) Rules 2018 have also come into force on 1 March 2018. Continue reading