The High Court in the decision of Top Builders Capital Berhad and two others (grounds of judgment dated 30 April 2021) set out certain important principles on scheme of arrangement law. The decision dived deep into issues on assessing the proof of debt for the creditors’ vote in a scheme and how to obtain leave to proceed against a restraining order.
Kwan Will Sen and Joyce Lim write about the recent judgment involving AirAsia X’s restructuring and its significance under the Cape Town Convention.
The Malaysian High Court in Kuala Lumpur had on 19 February 2021 handed down a significant judgment (click here for the grounds of judgment) in relation to AirAsia X Berhad (“AAX”)’s application for leave to convene creditors’ meeting for purposes of considering and approving a scheme of arrangement (“Leave Application”).
It analysed and interpreted certain provisions under the Convention on the International Interests in Mobile Equipment (“the Convention”) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (“the Protocol”), in particular that of Article XI(10) of the Protocol. Continue reading
In EY Malaysia’s Transactions Insights (February 2021), it was pointed out that the prolonged impact of the COVID-19 pandemic continues to disrupt Corporate Malaysia, financially and operationally. Almost a year on, the magnitude of financial risks has increased. A vast majority of companies would require some form of recapitalization to improve their financial position.
I identify six much-needed reliefs to provide a shot in the arm for Corporate Malaysia. The reliefs will help to inoculate and strengthen businesses against further distress.
In the Companies Commission of Malaysia (CCM) Consultation Document issued in July 2020, CCM set out policies and a draft proposed Bill in support of such reliefs. I wrote about these changes in The Edge Malaysia as well.
Like the vaccine rollout in Malaysia, I am hoping for a smooth and quick rollout of these proposed laws. The commentary below is based on the proposed laws by the CCM. Continue reading
The Federal Court in the Mansion Properties decision (see the grounds of judgment dated 24 November 2020) held that the application for a restraining order in a scheme of arrangement can be made ex parte (without notice).
This makes it advantageous for a distressed company to seek urgent moratorium protection through a restraining order. The distressed company can then pursue the debt restructuring in a scheme of arrangement and to have stability.
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
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.