Case Update: Court of Appeal on Staying the Dismissal of Judicial Management Application

The Court of Appeal in the Wellcom Communications case has decided on certain significant issues relating to a judicial management application (see the grounds of judgment dated 13 February 2019). This is Malaysia’s first appellate decision relating to judicial management.

In summary, upon the filing of a judicial management application, an automatic moratorium applies. This will stay all legal proceedings from continuing or from being commenced against the applicant company. The Court of Appeal has held that once the judicial management application is dismissed, there cannot be a grant of any stay order to stay the dismissal of the application in order to revive the moratorium effect. Continue reading

Case Update: Federal Court Confirms Jurisdiction to Set Aside a Winding Up Order

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

Corporate Rescue in Malaysia: Relevant Documents for Corporate Voluntary Arrangement and Judicial Management

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.

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

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

Judicial Management Case Study – The Rise and Fall of Photon Bhd

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