The High Court in the judicial management application of Re Scomi Group Bhddecided that public listed companies cannot apply for judicial management. Hence, Scomi Group Bhd’s judicial management application was dismissed.
I have only had sight of the brief grounds of decision and will only make some short points below. I may write a more detailed case update if the full grounds of judgment are issued.
In the matter involving Macro Resources Sdn Bhd, the Shah Alam High Court has set aside the extensions of the judicial management order made beyond the period of the initial 12 months. This decision appears to confirm that a judicial management order in Malaysia can only be made for the initial 6 months and with a single extension of 6 months only (i.e. a maximum period of 12 months).
Lee Shih and Peyton Teo complete this three-part series on key trends in judicial management in Malaysia.
We complete the final part on the trilogy on trends in judicial management (JM) cases in Malaysia. This article covers the making of the JM Order, the opposition to the judicial manager candidate, and issues post the JM Order.
Lee Shih and Peyton Teo summarise some key trends in judicial management in Malaysia.
Judicial management (JM) is part of Malaysia’s corporate rescue mechanisms that came into force on 1 March 2018. Three years on, we set out the JM trends in our three-parter series of articles.
JM is a court-supervised rescue mechanism aimed at rehabilitating financially distressed companies. A court-appointed insolvency practitioner is empowered to manage the distressed company’s affairs, business and property. This insolvency practitioner is known as a judicial manager.
Once appointed, the judicial manager would prepare and table a statement of proposal for the creditors to vote on. The purpose of this is to either resuscitate the company and to continue as a going concern or alternatively, work towards a more advantageous realisation of the company’s assets than in a winding up for the benefit of its creditors.
The filing of a JM application triggers an automatic moratorium on all legal proceedings against the company. This gives breathing space to a financially distressed company to focus on its restructuring efforts to pivot back towards financial viability.
Today was the second day of the Malaysia Insolvency Conference 2021. I had a very engaging session with my fellow speakers, Alex Chiang of Rodgers Reidy and Eddie Goh of Deloitte. The session was titled Lessons from Recent Landmark Cases. The session was a blend of practical issues and legal changes from recent court decisions.
At the session, I promised to set out a summary of the cases and legal principles I referred to. I set them out here.