On 26 and 27 October 2020, I spoke at the two-day webinar organised by the Companies Commission of Malaysia Training Academy. I was joined by Norhaslinda Salleh of the Companies Commission of Malaysia, Khoo Poh Poh of Ernst & Young and Jimmy Ng of Chooi & Co + Cheang & Ariff.
We covered a range of restructuring and insolvency topics. There were some interesting facts shared as well. Continue reading →
Lee Shih and Huey Lynn write about the Singapore decision on the appointment of interim judicial managers.
The Singapore High Court in Re KS Energy Ltd and another matter SGHC 198 granted an order for the appointment of interim judicial managers (IJM) over two companies upon the application by a creditor.
This decision is useful in setting out the principles for the appointment of interim judicial managers. This decision is also persuasive for Malaysian law as Malaysia’s judicial management provisions are modelled after Singapore. Continue reading →
The High Court decision of Re Biaxis (M) Sdn Bhd  MLJU 1188 (grounds of judgment dated 12 August 2020) set stringent requirements for a company to successfully apply for judicial management. These requirements may set an unnecessarily high bar for a distressed company to meet. Continue reading →
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 Companies Commission of Malaysia (SSM) has issued its Consultative Document Companies (Amendment) Bill 2020. The proposed amendments cover a wide range of areas. I will write another time on some of the other areas like beneficial ownership and other amendments.
One key aspect of the Companies Amendment Bill 2020 is the very significant amendments and strengthening of the restructuring framework through the scheme of arrangement and corporate rescue mechanisms. The proposed amendments follow similar moves taken by the United Kingdom and Singapore in assisting and helping distressed companies and ensuring safeguards for creditors’ interests.
I highlight the 10 most significant restructuring and corporate rescue amendments which are in the proposed Companies Amendment Bill 2020. I did take part in the initial consultation process as a member of some of the professional bodies. I very much welcome these much-needed restructuring and relief tools to help distressed businesses in the Covid-19 environment. 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.