Section 210 of the Companies Act 1967 ("Companies Act") provides a flexible tool for companies seeking to restructure their debts in Singapore by way of a scheme of arrangement, which is a Court-approved agreement between a company and its stakeholders in relation to the former's debt obligations. The provision has seen much use by companies in distress over the years to varying degrees of success, but the case of Defi Payments Pte Ltd (HC/OA 378/2023) is the first of its kind between a cryptocurrency company and its users.
In April 2023, the applicant company, Defi Payments Pte Ltd, obtained leave of the Singapore Court to convene a meeting of creditors for the purposes of presenting a scheme of arrangement for voting by its creditors ("Scheme"). The vote for the Scheme received strong creditor approval of more than 90% by number and in value (present and voting) from each of the two classes of creditors and across the board, far exceeding the statutory threshold set out in section 210(3AB) of the Companies Act. Following the vote, the Court granted the sanction of a cryptocurrency scheme of arrangement on 10 August 2023, and the Scheme has since taken effect.
The applicant company was represented by Rajah & Tann Singapore LLP's Sheila Ng, Deputy Head of the Restructuring & Insolvency Practice, together with Associates Benedict Tedjopranoto and Naomi Lim. Partners Hoon Chi Tern and Cynthia Wu, and Associate Melvin Chua from the Capital Markets/Mergers & Acquisitions Practice also advised the applicant company in the restructuring process.
For more information, click here to read our Legal Update.
