The law is constantly developing to fit the ever-changing world. Most recently, with the digitalisation of the commercial landscape and the proliferation of cryptocurrencies, non-fungible tokens (NFTs) and metaverse-related businesses, the courts have had to apply or adapt the law to deal with novel situations. This was the case in Re Babel Holding Ltd and other matters [2023] SGHC 98, where the Singapore High Court had to apply restructuring and insolvency law in the context of a cryptocurrency-related business.
The applicants were a group of companies in the cryptocurrency industry seeking to extend moratoria under section 64 of the Insolvency, Restructuring and Dissolution Act 2018 to facilitate the formulation of a restructuring plan, as well as to seal certain documents which contained the unredacted versions of lists of the applicants' creditors as well as letters of support in respect of the moratoria extension.
The Court allowed the sealing of the documents, highlighting the need to safeguard the commercially sensitive information at this point in the restructuring process. The Court also allowed the extension of the moratoria, finding that the applicants had met the statutory and common law requirements for such extension. In particular, the Court found that: (i) the applications were made bona fide; and (ii) there was a reasonable prospect of the intended scheme of arrangement working and being acceptable to the general run of creditors.
The decision demonstrates the application of Singapore's restructuring and insolvency framework to foreign companies and the Court's approach to the grant of moratoria and sealing orders in the particular circumstances of cryptocurrency and other digital businesses.
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