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With the coming into force of the Companies (Amendment) Act 2017 on 23 May 2017, the amendments to Singapore's laws on insolvency and debt restructuring came into effect, thus heralding a new insolvency and restructuring landscape in Singapore.
Amendments have been made to the scheme of arrangement regime in order to facilitate a more effective implementation of debt restructuring proposals. New measures include enhanced moratoriums against actions by creditors, new rescue finance provisions and cram-down provisions.
The judicial management process has also been amended. Amendments include the lowering of the insolvency threshold for a judicial management application, allowing foreign companies with a connection to Singapore to apply for judicial management, and the removal of the veto power of a creditor holding a floating charge over all or substantially the whole of a company’s assets. New rescue finance provisions have also been introduced to the judicial management process.
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When a company enters into liquidation, control of the company's operations shifts into the hands of the appointed liquidators. In Petroships Investment Pte Ltd v Wealthplus Pte Ltd (in members' voluntary liquidation) (Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd and another, interveners) [2017] SGHC 122, the High Court examined the circumstances in which it would order liquidators to be removed from their positions.
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On-demand bonds provide an important degree of certainty in commercial arrangements. Upon demand, the beneficiary of the bond is able to receive payment of a sum not exceeding the bond amount. In Tactic Engineering Pte Ltd (in liquidation) v Sato Kogyo (S) Pte Ltd [2017] SGHC 103, the Singapore High Court affirmed that beneficiaries will not easily be prevented from calling on on-demand bonds. While the issuer may resist payment on grounds of unconscionability, proving such unconscionability continues to be challenging.
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The confidentiality of and legal professional privilege over documents and communications are key concerns of any client. They are also of concern to corporate entities with in-house counsel who provide legal advice to management. These issues take on a new dimension in an age when the security of computers is threatened as never before. In the case of Wee Shuo Woon v HT S.R.L. [2017] SGCA 23, the Singapore Court of Appeal had to consider whether advice that had been accessed by hacking the client's email account and then posted on WikiLeaks were in the public domain and no longer entitled to legal protection.
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Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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Rajah & Tann Singapore LLP
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#06-07
Singapore 18937
Republic of Singapore
http://sg.rajahtannasia.com
Contacts: Francis Xavier, SC, PBMPartnerD +65 62320551francis.xavier@rajahtann.comChia Kim HuatPartnerD +65 62320464kim.huat.chia@rajahtann.comAndrew CL OngPartnerD (65) 62320259andrew.c.ong@rajahtann.comHoward CheamPartnerD +65 62320685howard.cheam@rajahtann.com| Rajah & Tann Asia is a network of legal practices based in Asia. |
Member firms are independently constituted and regulated in accordance with relevant local legal requirements. Services provided by a member firm are governed by the terms of engagement between the member firm and the client. |
This update is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this update. |
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