We will cover strategy and insight from the perspective of an insolvency practitioner and legal practitioner. Companies can consider the options to restructure its debts, maintain a good financial position, and emerge stronger in the COVID-19 environment.
Registration is free and you can register here. Seats are limited.
The High Court in its grounds of judgment dated 10 June 2020 in Goldpage Assets Sdn Bhd v Unique Mix Sdn Bhd held that unsecured creditors can intervene in a judicial management application. The unsecured creditors’ views can then be heard in opposing the making of the judicial management order. This is an important decision clarifying this often argued point.
On 10 April 2020, the Companies Commission of Malaysia (SSM) announced that seven reliefs will be provided to companies in light of the COVID-19 outbreak and Malaysia’s Movement Control Order (MCO). These initiatives are very much welcomed. They range from temporary protection from winding up of companies, extension of time to lodge statutory documents, and an extension of time for the annual general meeting.
I will cover each of these seven reliefs and with some brief comments.
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.
Qualified persons can now apply to be licensed as liquidators, or also known as insolvency practitioners, in Malaysia. This allows for the licence holder to take on appointments as: (i) liquidator; (ii) receiver or receiver and manager; (iii) judicial manager; and (iv) a nominee in a corporate voluntary arrangement.
The amendment Bill will make amendments to the Companies Act 2016 (CA 2016). I have since updated this article to take into account the Parliamentary debate of the amendment Bill.
I highlight seven of the more significant amendments. There will be welcome clarification of the effect of section 66 on the execution of what sort of documents, as well as the redemption of preference shares out of capital. But I can see issues relating to the appointment of receivers or receivers and managers after liquidation. There is a severe dilution of the ability to apply for judicial management.
#1: Section 66 to Only to Apply to Specific Types of Documents