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.