The Federal Court in grounds of judgment dated 22 November 2018 in the SKS Foam decision confirmed the Court’s jurisdiction to set aside a perfected winding up Order in certain limited instances.
The Court is able to exercise its jurisdiction under the Federal Court case of Badiaddin to set aside its own Order where the defect is of such a serious nature that there is a need to set aside the Order in the interests of justice. Continue reading
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 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
The Malaysia Insolvency Conference 2018 will be held this Thursday 22 November 2018. I am organising the case study session where it will feature a hypothetical judicial management case study. It is still not too late to sign up for the conference.
There is a strong lineup of speakers: The Honourable Judicial Commissioner Puan Wong Chee Lin, Melisa Tai of Adnan Sundra & Low, and Koo Yin Soon of Shearn Delamore & Co. The two speakers will take on the role of opposing counsel for and against a judicial management application. The Judicial Commissioner will then hear arguments, pose questions and then decide on the application. The counsel have already prepared their skeletal submissions and filed it before the Judicial Commissioner.
As a sneak preview, here are the background facts for this case study of the fictional Photon Bhd and how the company applies for judicial management. Will the judicial management application succeed? Will Photon Bhd rise again? Continue reading
On 22 November 2018, the Malaysia Insolvency Conference 2018 will be held at Connexion @ Nexus, Bangsar South. The conference is jointly organised by the Malaysian Institute of Accountants (MIA), the Insolvency Practitioners Association of Malaysia (IPAM), and the Malaysian Institute of Chartered Accountants (MICPA).
The High Court case of Re Leadmont Development Sdn Bhd [2018] MLJU 1320; [2018] 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
