The High Court in the Sulaiman & Taye decision (see the grounds of judgment dated 8 July 2020 of Ong Chee Kwan JC) deals with very significant issues in relation to fraudulent trading. Fraudulent trading is where directors of a company have to bear personal liability for the debts of a company in winding up. This is because the directors carried on the business of the company with the intent to defraud its creditors. In particular, whether the delinquent directors bearing personal liability then has to pay directly to the aggrieved applicant or to pay into the wound up company’s assets for the general benefit of all the creditors. Continue reading
The Court of Appeal in the appeal involving Million Westlink Sdn Bhd (see the notes of proceedings of 21 July 2020 in the Court of Appeal Civil Appeal No. B-02(IM)-1590-08/2019) has confirmed that unsecured creditors have the right to be heard and to oppose the making of a judicial management order. The full grounds of judgment are not out yet.
This now overturns the earlier High Court decision in Million Westlink Sdn Bhd v Maybank Investment Bank Bhd & Ors  MLJU 1721. The outcome of this Court of Appeal decision also appears to be similar to the High Court decision in Goldpage Assets Sdn Bhd (which I wrote about here).
When a company applies for judicial management, the company would be near insolvent. The company needs rescuing and an orderly dealing with its creditors. Hence, this Court of Appeal decision is important in clarifying that unsecured creditors have a right to appear and, if necessary, to oppose the making of the judicial management order.
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 Court of Appeal in Boulevard Plaza Sdn Bhd v Gas District Cooling (Putrajaya) Sdn Bhd  MLJU 1965 allowed the receiver and manager’s application to compel a chilled water provider to continue with the supply of chilled water to the company under receivership. This is a far-reaching ability to compel the continuation of certain essential supplies. This decision would also apply to the situation of a judicial manager seeking for the continuation of such supplies.
I will be chairing one of the events at the inaugural Thought Leaders 4 FIRE (Fraud, Insolvency, Recovery and Enforcement) event. It is the FIRE Asia Virtual 3-day event held on 29 June to 1 July. The topics will cover topics on fraud, asset recovery and insolvency.
You can join as a member and then attend the virtual for free. Sign up here.
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.