I OVERVIEW OF RESTRUCTURING AND INSOLVENCY ACTIVITY

The landmark legislative amendments to Singapore's restructuring and insolvency legal framework in 2017 (the 2017 Amendments) were implemented as part of a concerted push by the Singapore government to promote Singapore as an international centre for debt restructuring. Drawing inspiration from the United States Chapter 11 framework, the 2017 Amendments sought to put in place a conducive legal and regulatory framework to facilitate corporate rescues and cross-border debt restructurings with Singapore as an international and regional hub.

Following the implementation of the 2017 Amendments, Singapore's enhanced restructuring framework attracted a number of filings in the second half of 2017.2 At the Global Restructuring Review Awards 2017, Singapore was recognised as 'Most Improved Jurisdiction'.3 The Singapore government is expected to continue its efforts to bolster and fine-tune Singapore's insolvency laws in 2018, with a proposed new omnibus Insolvency Bill, targeted to be enacted in the second half of 2018.4

II GENERAL INTRODUCTION TO THE RESTRUCTURING AND INSOLVENCY LEGAL FRAMEWORK

i Restructuring and insolvency legal framework

At present, the main sources of legislation in Singapore governing corporate restructuring and insolvency are the Companies Act, with certain provisions in the Bankruptcy Act imported into the Companies Act with necessary modifications. Both Acts are supplemented by various subsidiary legislation.5 Under the framework, there are three broad areas of court-supervised insolvency and restructuring procedures for companies: schemes of arrangement, judicial management and liquidation.

Schemes of arrangement

Part VII of the Companies Act sets out the statutory framework for schemes of arrangement. A scheme of arrangement is a statutory mechanism for securing agreement between a company and its creditors, members or shareholders in respect of a compromise or arrangement without the need for unanimous consent. Thus, under the scheme, creditors may, for example, agree to rearrange or extinguish debts owed by the company to them in part or in whole, or to defer repayment of the same. The 2017 Amendments to the Companies Act were aimed at addressing potential shortcomings in the scheme of arrangement process,6 and these are discussed further in Section III.

Judicial management

Part VIIIA of the Companies Act sets the statutory framework for judicial management. Judicial management may be utilised either as a tool for corporate rescue or to carry out a more advantageous realisation of a company's assets than would be possible in a winding up. As regards the former, it has been observed that the rehabilitative value of judicial management has been hampered by perceived weaknesses in the statutory regime, arguably contributing to a historically low success rate.7 The 2017 Amendments to the Companies Act were also introduced to address these potential shortcomings, and these are discussed further in Section III.

Liquidation

Under the Companies Act, a company may be wound up compulsorily by the court or voluntarily.8 In a compulsory liquidation, parties with standing under the Companies Act, including creditors of a company,9 may apply to court for an order that a company be wound up. It may be the case that where a contributory applies to wind up a solvent company, it must meet a higher standard of proof and show that it has a 'very strong case' to succeed in winding up the company, for example, suspicious circumstances or fraud.10

The Companies Act provides a list of grounds upon which the court may make an order to wind up a company,11 chief of which is that the company is 'unable to pay its debts'.12 A statutory presumption that the company is unable to pay its debts arises in two circumstances. First, and most commonly relied on, if a statutory demand for a sum exceeding S$10,000 has been duly issued to the company and the company for three weeks thereafter neglects to pay the sum or to secure or compound for it to the creditor's reasonable satisfaction, the company is deemed to be unable to pay its debts.13 Second, if an execution or other process issued on a judgment of any court against the company is returned unsatisfied in whole or in part, the company is also deemed to be unable to pay its debts.14

Where the creditor does not rely on either of these statutory presumptions, the creditor must prove to the satisfaction of the court that the company is unable to pay its debts (including contingent and prospective debts, if any).15 In this regard, the courts have eschewed any single test for insolvency, preferring instead to have regard to all evidence that may appear relevant to the question of insolvency.16 That being said, in general, there are two tests that courts typically deploy – namely whether the company is 'cash-flow insolvent' (i.e., unable to pay its debts as they fall due) and 'balance-sheet insolvent' (i.e., the company's liabilities, including contingent and prospective liabilities, exceed its assets). Non-binding expressions of financial support, in the absence of binding obligation on the party expressing an intention to provide such financial support, cannot be relied upon to prove that a company is not insolvent.17 While such letters of support may be relevant, the weight to be attributed to them would depend on the likelihood that they will be honoured.18 A company that would otherwise have been cash-flow insolvent would be found to be cash-flow solvent on the sole basis of non-binding letters of support only in an 'exceptional case'.19

In a voluntary liquidation, the court need not get involved. There are two types of voluntary liquidation – a creditors' voluntary liquidation (CVL) and a members' voluntary liquidation (MVL). As a matter of procedure, both CVL and MVL are commenced by the company resolving by special resolution (i.e., by a majority of not less than three-quarters) that it be wound up voluntarily.20 If the company's directors are able to make a declaration that the company will be able to pay its debts in full within a period not exceeding 12 months from the commencement of winding up, the liquidation begins as an MVL.21 In practice, therefore, in the context of corporate insolvency where the company is unable to pay its debts, it is likely to be wound up by CVL. An MVL may be converted into a CVL at any time if the liquidator appointed forms the view that the company will not be able to pay or provide for the payment of its debts within the period stated in the aforesaid declaration.22

A key difference between an MVL and CVL is that in a CVL, the company must convene a meeting of creditors,23 where the creditors will be able to nominate a liquidator that will prevail over the company's nomination.24

ii Statutory avoidance provisions and clawback

This section discusses a number of recent, non-exhaustive examples of clawback actions.

Any disposal of the company's property made after the commencement of winding up is void.25 However, it is possible to apply to court to prospectively or retrospectively validate such disposal.26

Additionally, certain transactions entered into by the company prior to the commencement of liquidation may be void or voidable. An 'unfair preference', which is a transaction that has the effect of putting a creditor in a better position than the creditor would otherwise have been in the event of the company's insolvency had the preference not been given, may be set aside if the transaction was entered into in the six months preceding the commencement of winding up.27 Where the person preferred is a 'person connected with the company' (including directors of the company), this period is two years. An unfair preference must have been made with the intention to prefer – an intention that is presumed if the transaction is entered into with a person connected with the company. The 'running account' principle is a defence of the intention to prefer, whereby a continuing relationship of debtor and creditor may be sufficient to show that the transaction was entered into by reference to proper commercial considerations (provided that the impugned transaction has been entered into with the intention of obtaining new value to keep the business going).28

An 'undervalue transaction', including transactions that were entered into for no consideration, or for a value of which (in money or money's worth) is significantly less than the value (in money or money's worth) of the consideration provided, may be set aside if entered into within the five years preceding the commencement of winding up.29 However, the transaction will not be set aside if it is proven that the transaction was entered into in good faith for the purpose of carrying on the company's business, and there were reasonable grounds for believing that the transaction would benefit the company.30

A floating charge entered into within six months of the commencement of the winding up is valid to the extent of any cash paid to the company in consideration for the charge, unless it is proven that the company was solvent immediately after the creation of the charge.31

A Singaporean court has powers to order a partial reversal of transactions in appropriate cases if 'justice so requires', for example, where the parties' claims are uncontroversial, or there is an agreement between the creditors and the liquidator.32 This is to avoid a situation in which related companies repaid the monies to the company, only to have a substantial portion of those monies repaid to themselves as unsecured creditors of the company.

The above applies similarly in judicial management, with the necessary modifications.33

iii The position of secured creditors

When entering into a loan transaction with a company that is insolvent or near insolvency, secured creditors should be mindful of the statutory avoidance provisions discussed in Section II.ii.

Further, any creditor intending to secure the debt with a floating charge should take care to ensure the floating charge is registered within 30 days, failing which the floating charge is void as against a liquidator.34

As to the enforcement of security, in a winding up, the court may make an order to stay or restrain further proceedings against the company at any time after the making of a winding-up application.35 Further, upon the winding-up order being made, no action or proceeding shall be commenced without the leave of court.36

As to the ranking of creditors in distribution, a creditor with a registered floating charge is subordinated to a creditor with a fixed charge and certain statutory preferential debts, but ranks ahead of unsecured creditors.37 Where goods in which one secured party has a perfected security interest have been commingled with goods in which another party has a perfected security interest, each party is entitled to the proportion of the product that the value of that secured party's collateral bore to the sum of the value of both parties' collateral at the time of the commingling.38 In the event that there is not enough stock to pay off all the creditors, the stock should be distributed between the creditors on a rolling charge basis (i.e., taking into account the rateable interests of each contributor to the mixed fund immediately before any withdrawal).39

iv Directors' duties in insolvency

A director is under a duty to act honestly and use reasonable diligence, as statutorily provided for in the Companies Act,40 which mirrors fiduciary duties imposed on directors by common law.

It has been recognised for some time under Singaporean law that where the company is insolvent or near insolvency, directors must additionally take into account the interests of the company's creditors to ensure the company's assets are not dissipated.41 As to what constitutes 'nearing insolvency', the courts have steered clear of applying any bright-line test, preferring instead a broad approach – as long as there are reasons to be concerned that the creditors' interests are or will be at risk, directors ought to have due regard to their interests.42

In addition to the above, personal and criminal liability may potentially be imposed on directors under the Companies Act. A director who is knowingly a party to the company contracting a debt of which there was no reasonable or probable ground of expectation that the company would be able to pay off could face civil and criminal liability for insolvent trading.43 Additionally, if the business is found to have been carried on with the intent to defraud the company's creditors, the director could face civil and criminal liability for fraudulent trading.44

Further, while the statutory avoidance provisions discussed in Section II.ii are not per se expressed to impose duties on directors, the court has recently confirmed that a director would likely be liable for a breach of fiduciary duties where there has been an adverse finding under the statutory avoidance.45 Further, the Court of Appeal has confirmed that claims for breaches of common law fiduciary duties are separate causes of action from claims for statutory avoidance provisions, and may, therefore, be brought notwithstanding the fact that the relevant time limit for the statutory avoidance provision has passed.46 In this situation, it is for the party seeking recovery to prove that the acts are in breach of fiduciary duties, and in seeking to prove a breach, the mere fact of payment to related parties is insufficient grounds for liability.

III RECENT LEGAL DEVELOPMENTS

i The 2017 Amendments considered
Schemes of arrangement

The 2017 Amendments introduced significant changes to the law governing schemes of arrangement, with the introduction of amendments to the Companies Act through the Companies (Amendment) Act 2017 (Act 17 of 2017).47 In the months following the 2017 Amendments the amendments coming into effect, the Singapore courts have considered the application of the new provisions on a number of occasions.

One of the key amendments supplementing the scheme of arrangement framework is the enhanced moratorium, previously recognised by the Insolvency Law Review Committeee (ILRC) as a key shortcoming of the previous regime for schemes of arrangement.48 There are four broad enhancements: first, an interim 30-day moratorium now arises automatically upon a company making an application for a moratorium.49 Next, the moratorium now covers a wider scope, including restraining secured creditors from enforcing their security.50 Third, the court may now order for a moratorium to have in personam worldwide effect.51 Lastly, an application may be made to extend the moratorium to the company's related companies.52 Certain prescribed arrangements, including set-off or netting arrangements, are excluded from the ehnanced moratorium. Nevertheless, companies undergoing restructuring have availed themselves to the enhanced regime of moratoriums, including offshore support vessel owner-operator and subsidiary of Ezra Holdings Limited, EMAS Offshore Limited,53 Indonesian developer PT Bakrieland Development Tbk (via Singapore-incorporated BLD Investments Pte Ltd),54 shipbuilding company Nam Cheong Limited,55 heavy equipment supplier Hoe Leong Corporation Ltd,56 and water treatment firm Hyflux Ltd.57

In effect, the 2017 Amendments have created two separate regimes under which companies may obtain moratorium – under the new Section 211B of the Companies Act, and the old Section 210(10) of the Companies Act. While Pacific Andes Resources Development Ltd [2016] SGHC 210 (Pacific Andes) had liberalised the requirements for obtaining a moratorium under the old Section 210(10),58 it is clear that the 2017 Amendments provide much more comprehensive protection for companies seeking to undergo restructuring. The Singapore High Court, in Re: Empire Capital Resources Pte Ltd [2018] SGHC 36, held that, notwithstanding the 2017 Amendments, the Singapore court will not, in general, exercise its inherent jurisdiction to stay proceedings overseas where a moratorium is sought under Section 210(10) of the Companies Act.59 This is unaffected by the 2017 Amendments, and in particular, Section 211B of the amended Companies Act (which permits the Singapore courts to give extraterritorial effect to any moratorium).

In view of concerns that a minority dissenting class of creditors can stymie an otherwise viable scheme of arrangement,60 the 2017 Amendments also provided for cross-class cramdowns, provided that the scheme does not discriminate unfairly between the classes of creditors and is fair and equitable (provided that the requisite majority is attained in respect of all the creditors as a whole).61

Third, in recognition of the potential for significant time and costs savings, the court may now approve a pre-packaged scheme where it is satisfied that the requisite majority of creditors would have approved the scheme.62 Thus, the process for scheme of arrangement may be fast-tracked. There has been at least one instance of a pre-packaged scheme being granted since the 2017 Amendments, where the Singapore court approved a pre-packaged scheme in relation to Hoe Leong Corporation Ltd in January 2018.63

Fourth, in a bid to facilitate the possibility of ailing companies obtaining fresh financing, the 2017 Amendments empower the court to confer various levels of 'super priority' for rescue financing in certain circumstances.64 'Rescue financing' is statutorily defined to mean financing which is necessary either for the survival of the company as a going concern, or to achieve a more advantageous realisation of the company's assets than in a winding-up.65 The case of Re Attilan Group Ltd [2018] 3 SLR 898 (Re Attilan) was the first reported decision of the Singapore courts concerning the application of Section 211E of the Companies Act. In Re Attilan, the company applied for leave to convene a creditor's meeting to consider a scheme of arrangement under Section 210(1) of the Companies Act, and for super priority status to be granted pursuant to Section 211E of the Companies Act. The High Court held that it must be sufficiently satisfied on a balance of probabilities, with credible evidence, that the requirements stipulated under Section 211E are met.66 Under Section 211E(1)(a) of the Companies Act, the applicant must show that it has expended reasonable efforts to secure other types of financing without super priority, before the court will exercise its discretion to grant super priority.67 Under Section 211E(1)(b) of the Companies Act, the debtor must demonstrate reasonable efforts have been undertaken to explore other types of financing without priority status.68 Evidence should, therefore, be given of, for example, failed negotiations, and mere unsubstantiated assertions will be insufficient.69 The High Court also identified various considerations relevant to the exercise of its discretion, including whether: (1) the proposed financing is in the exercise of sound and reasonable business judgment; (2) no alternative financing is available on any other basis; (3) such proposed financing is in the best interests of the creditors; (4) no better proposals are before the court; (5) the proposed financing is necessary to preserve the assets of the estate and is necessary, essential and appropriate for the continued operation of the debtors' business; (6) the terms of the proposed financing are fair, reasonable and adequate; and (7) the financing agreement was negotiated in good faith and at arm's length.70 Taking into account the above factors, the Court in Re Attilan disallowed the application for super-priority status on the grounds that there was insufficient evidence of any efforts (let alone reasonable efforts) to secure financing without priority status.

The High Court in Re Attilan also observed that US case authorities on rescue financing may generally be helpful (but not binding) in assisting the Singapore courts in interpreting the statutory language of the 2017 Amendments concerning rescue financing.71 Additionally, as Section 211E of the Companies Act provides for varying levels of priority that may be ordered for the rescue financing, the High Court observed that future applicants ought to give some thought as to the appropriate level of super priority sought, and to provide reasons for the same.72

Judicial management

The 2017 Amendments relating to 'super priority' in rescue financing in schemes of arrangements are mirrored in the judicial management regime. Further, in an effort to address observations that judicial management has historically been invoked at too late a stage for the intervention to result in successful rehabilitation of the company,73 the threshold for a judicial management application to be made has been lowered from a company being 'unable to pay its debts' to being 'likely to become unable to pay its debts'. More significantly, the amendments now allow foreign companies to avail themselves of Singapore's judicial management regime.

Cross-border insolvency

Prior to the 2017 Amendments, cross-border insolvency was principally governed by Sections 351 and 377 of the Companies Act and the common law.74 The former gave Singaporean courts the power to wind up an 'unregistered company' (including a foreign company). The latter provided, inter alia, for liquidators appointed in a foreign company's place of incorporation or origin to have the same powers and functions as a liquidator for Singapore. Following the 2017 Amendments, the UNCITRAL Model Law on Cross-Border Insolvency (the UNCITRAL Model Law) has been adopted in Singapore with certain modifications under the Tenth Schedule of the Companies Act (the Singapore Model Law).

In Re: Zetta Jet Pte Ltd and others [2018] SGHC 16 (Re Zetta Jet), the Singapore High Court considered the application of the Singapore Model Law in relation to Chapter 11 proceedings commenced in the US in respect of US-incorporated Zetta Jet USA, Inc (Zetta USA) and its wholly owned Singapore subsidiary, Zetta Jet Pte Ltd (Zetta Singapore). A worldwide moratorium was granted by the US courts. Thereafter, shareholders in Zetta Singapore commenced a suit, and obtained an injunction in the Singapore court restricting the remaining shareholders and Zetta Singapore from carrying out any further steps in and relating to the bankruptcy filings in the US. Contrary to the Singapore injunction, steps were taken in the US bankruptcy proceedings. In particular, the Chapter 11 proceedings were subsequently converted into Chapter 7 proceedings, and a Chapter 7 trustee was appointed over Zetta USA and Zetta Singapore. The trustee applied to be recognised in Singapore pursuant to Section 354B of the Companies Act read with the Articles 15 and 16 of the Singapore Model Law. Under Article 6 of the Singapore Model Law, the Singapore court may refuse recognition if such recognition would be 'contrary' to the public policy of Singapore. This may be contrasted against the UNCITRAL Model Law, which allows recognition to be refused if such recognition would be 'manifestly contrary' to public policy. The Singapore Court held that the omission of the word 'manifestly' in the Singapore Model Law could only be conscious and deliberate,75 and such omission would have the effect of lowering the standard for exclusion on public policy grounds under the Singapore Model Law.76 The Court observed that this lower standard may well mean that purely domestic public policy concerns may be sufficient to justify the Court's refusal to recognise foreign insolvency proceedings.77 In this case, the Court held that while the Court's power to refuse recognition under Article 6 was discretionary, it would be rare for the Singapore court not to refuse recognition where there has been non-compliance with a Singapore court order, as this would undermine the administration of justice.78 In the circumstances, the Court granted limited recognition to the trustee only for the purposes of applying to set aside or appeal the Singapore injunction.79

Additionally, the 2017 Amendments abolished the ring-fencing rule that previously required a Singaporean liquidator appointed over a foreign company to pay net amounts recovered in the liquidation process to the foreign liquidator appointed in the company's place of incorporation only after paying debts and satisfying any liabilities incurred in Singapore.80 Under the revised law, the ring-fencing rule applies only to 'relevant companies', defined to include, inter alia, banks, finance companies and insurers that are licensed.81

ii Omnibus insolvency legislation

As mentioned above, a proposed new omnibus Insolvency Bill is expected to consolidate Singapore's existing personal and corporate restructuring and insolvency laws (currently under two separate regimes, governed by the Bankruptcy Act and Companies Act respectively) into a single piece of legislation.82 Among other anticipated changes are the streamlining of legislation for consistency and clarity, the implementation of the remaining recommendations of the ILRC formed in 2010 by the Ministry of Law and the introduction of a framework for the regulation of insolvency professionals.

iii Case law
Order for a meeting to be summoned under Section 210(1) of the Companies Act, and sanction of schemes

The Court of Appeal further clarified the law on the voting rights of different classes of scheme creditors in SK Engineering & Construction Co Ltd v. Conchubar Aromatics Ltd and another appeal [2017] 2 SLR 898 (SK Engineering), expanding on the principles set out in The Royal Bank of Scotland NV v. TT International Ltd [2012] 2 SLR 213 (TT International) and Re Conchubar Aromatics Ltd [2017] 3 SLR 748 (Re Conchubar). TT International and Re Conchubar had affirmed the principle that certain votes of creditors in a scheme of arrangement should be discounted if they represented 'special interests' of related-party creditors, but both courts had declined to prescribe a test for identifying related-party creditors, and left open the point of law as to the appropriate discount to be applied to votes of related creditors which are not wholly-owned subsidiaries of the scheme company. In SK Engineering, the Court identified the following factors relevant to establishing the relationship of a 'related creditor': (1) the scheme company controls the creditor, or vice versa; (2) the scheme company and the creditor have a common controlling shareholder; (3) the scheme company and creditor have a common shareholder holding less than 50 per cent of the shares, but more than de minimis stake in both companies; (4) the scheme company and the creditor have a common director (in particular, a director who proposes or supports the scheme); (5) the controlling shareholders of the scheme company and the creditor are not common, but are related by blood, adoption or marriage, or are corporate entities who are in turn controlled by individuals who are related by blood, adoption or marriage; and (6) the creditor is related to the controlling shareholder or a director in the scheme company by blood, adoption or marriage.83

Registration of charges

The Court in Duncan, Cameron Lindsay and another v. Diablo Fortune Inc and another matter [2017] SGHC 172 (Diablo Fortune) found that Section 131 of the Companies Act (which provides that any charge that is not registered shall be void against the liquidator and any creditor of the company) applies to a Singapore-incorporated company, regardless of the law of the creation of the charge instrument or location of the property charged.84 While non-awareness of the requirement for registration suffices for inadvertence for the purposes of the court granting an extension of time or rectification under Section 137 of the Companies Act, the chargee must persuade the court to exercise its discretion in the chargee's favour.85 The discretion will not ordinarily be exercised if the company has been wound up, except in exceptional cases, such as fraud.86 Ultimately, the overriding question the court will ask is whether it would be just and equitable to grant an extension of time to register the charge.87

The Court in Diablo Fortune also held that liens over sub-freight and sub-hire fall within the meaning of a charge under Section 131 of the Companies Act, and must, therefore, be registered.88 As at the time of writing, the Ministry of Law has issued a consultation paper seeking feedback on proposed amendments to the Companies Act to exempt such liens from the requirement of registration under Section 131 of the Companies Act, in recognition of the practical and commercial obstacles to registering such instruments.89 Since then, the decision of the High Court in Diablo Fortune has been upheld by the Court of Appeal.90

Disclaimer of onerous property

The Court in Carpe Diem Holdings Pte Ltd v. Carpe Diem Playskool Pte Ltd [2018] SGHC 37 (Carpe Diem) clarified that there is no obligation on a liquidator to disclaim onerous property under Section 332 of the Companies Act, and the liquidator is entitled to exercise discretion in this regard.91 A party whose claim is not recognised will be left with a claim in damages for breach of contract, and would have to prove for such damages in the estate of the liquidated company.92

IV SIGNIFICANT TRANSACTIONS, KEY DEVELOPMENTS AND MOST ACTIVE INDUSTRIES

The previous edition of this chapter highlighted three companies in the offshore and marine and oil and gas industries that were undergoing judicial management – Swiber Holdings Limited (a listed offshore services firm), Technics Oil & Gas (an oil and gas services firm) and Swissco Holdings Limited (a listed marine firm). At the time of writing, all three companies still remain under judicial management, with the Singapore court granting a number of extensions of the relevant judicial management orders in respect of all three companies. Since then, offshore services provider Otto Marine Limited93 and bunker supplier Panoil Petroleum Pte Ltd94 have also been placed under judicial management. The offshore and marine group Marco Polo Marine Ltd emerged from a court-sanctioned debt restructuring exercise in January 2018.95 Public interest in the outcome of the restructuring of the above companies remains significant, given the reported exposure of local banks to this sector, and the significance of the offshore and marine and oil and gas sectors to the Singaporean economy.

V INTERNATIONAL

As discussed above at Section III.i, Singapore has recently adopted the Model Law.

In addition, the Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters (the Guidelines), originally proposed at the inaugural Judicial Insolvency Network (JIN) in October 2016, were adopted by Delaware and Singapore courts on 1 February 2017. The Guidelines, intended to 'improve in the interests of all stakeholders the efficiency and effectiveness of cross-border proceedings',96 mark the first time that a formal framework has been adopted and implemented by courts in coordination and cooperation in relation to cross-border insolvency. Among other things, the Guidelines provide for communications between courts to take place via telephone or video conference call or any other electronic means.97 As at the time of writing, apart from Delaware and Singapore, other jurisdictions that have implemented the Guidelines include England and Wales, the United States (Southern District of New York and Southern District of Florida), Australia (New South Wales), the British Virgin Islands and Bermuda.

Following approval by both the Singapore High Court and the New York Bankruptcy Court in March 2018,98 the cross-border restructuring proceedings in respect of Singapore-listed offshore services provider Ezra Holdings are slated to be conducted under the new cross-border insolvency protocol. The company had filed Chapter 11 proceedings in the US, and a scheme of arrangement under Section 210 of the Companies Act in Singapore.99

VI FUTURE DEVELOPMENTS

Following the implementation of the 2017 Amendments, it is expected that the Singapore government will continue its various policy initiatives, in consultation with the relevant stakeholders, to promote Singapore as an international debt restructuring hub. In particular, the proposed omnibus Insolvency Bill, which is slated for enactment in the second half of 2018, promises further refinements to the current insolvency regime. With more cases being heard and decided by the courts under the enhanced restructuring regime, users and stakeholders can look forward to greater clarity and certainty in terms of processes and outcomes in relation to cross-border corporate rescues and restructurings.


Footnotes

1 Kenneth Lim Tao Chung is a partner at Allen & Gledhill LLP.

2 Bloomberg, Singapore Makes a 'Good Start' on its Debt Restructuring Ambitions (23 November 2017) https://www.bloomberg.com/news/articles/2017-11-22/singapore-has-good-start-in-push-for-debt-
restructuring-hub (accessed on 30 May 2018).

3 Singapore Ministry of Law, Singapore Recognised as Most Improved Jurisdiction at Inaugural Global Restructuring Review Awards (22 June 2017) https://www.mlaw.gov.sg/content/minlaw/en/news/press-releases/singapore-recognised-as-most-improved-jurisdiction-at-inaugural-.html (accessed on 9 May 2018).

4 The Straits Times, Bill to streamline insolvency framework to be introduced in 2018: K Shangmugam (24 August 2017) and Ministry of Law, 'Keynote address by Mr K Shanmugam at Singapore Insolvency Conference 2017' (24 August 2017) https://www.mlaw.gov.sg/content/minlaw/en/news/speeches/keynote-address-by-mr-k-shanumgam--minister-for-home-affairs-and.html (accessed on 9 May 2018).

5 For example, the Companies (Winding-Up) Rules (Cap 50, Rg 1, 2006 Rev Ed).

6 Final Report of the Insolvency Law Review Committee (ILRC Report) at p. 135.

7 ILRC Report at pp. 82–84.

8 Section 247 of the Companies Act.

9 Section 253 of the Companies Act.

10 Petroships Investment Pte Ltd v. Wealthplus Pte Ltd (in members' voluntary liquidation) [2017] SGHC 122 at [263].

11 See Section 254 of the Companies Act for the full list.

12 Section 254(1)(e) of the Companies Act.

13 Section 254(2)(a) of the Companies Act.

14 Section 254(2)(b) of the Companies Act.

15 Section 254(2)(c) of the Companies Act.

16 Chip Thye Enterprises Pte Ltd (in liquidation) v. Phay Gi Mo [2004] 1 SLR(R) 434 at [20].

17 Living the Link Pte Ltd (in creditors' voluntary liquidation) v. Tan Lay Tin Tina [2016] 3 SLR 621 (Living the Link) at [30]; CCM Industrial Pte Ltd (in liquidation) v. Chan Pui Yee [2016] SGHC 231 at [24].

18 Parakou Shipping Pte Ltd (in liquidation) v. Liu Cheng Chan [2017] SGHC 15 (Parakou (HC)) at [84].

19 Parakou (HC) at [84].

20 Section 290(1)(b) of the Companies Act.

21 Section 298 of the Companies Act.

22 Section 295 of the Companies Act.

23 Section 296 of the Companies Act.

24 Section 297(1) of the Companies Act.

25 Section 259 of the Companies Act.

26 Centaurea International Pte Ltd (in liquidation) v. Citus Trading Pte Ltd [2016] SGHC 264.

27 Section 329 of the Companies Act, read with Section 99 of the Bankruptcy Act.

28 Living the Link at [48].

29 Section 329 of the Companies Act read with Section 98 of the Bankruptcy Act.

30 Companies (Application of Bankruptcy Act Provisions) Regulations, r 6.

31 Section 330 of the Companies Act.

32 Living the Link at [76].

33 Sections 227X(b) and 227T(1) of the Companies Act.

34 Section 131(3)(g) of the Companies Act.

35 Section 258 of the Companies Act.

36 Section 262(3) of the Companies Act.

37 Section 328 of the Companies Act.

38 Pars Ram Brothers (Pte) Ltd (in creditors' voluntary liquidation) v. Australian & New Zealand Banking Group Ltd [2017] SGHC 38 at [14]–[16].

39 Pars Ram Brothers (Pte) Ltd (in creditors' voluntary liquidation) v Australian & New Zealand Banking Group Ltd and others [2018] SGHC 60 at [21].

40 Section 157(1) of the Companies Act.

41 Liquidators of Progen Engineering Pte Ltd v. Progen Holdings Ltd [2010] 4 SLR 1089.

42 Dynasty Line Ltd (in liquidation) v. Sukamto Sia and another and another appeal [2014] SGCA 21.

43 Sections 339(3) and 340(2) of the Companies Act.

44 Section 340 of the Companies Act.

45 Living the Link at [48]. See further at Section III.

46 Parakou Investment v. Parakou Shipping Pte Ltd (in liquidation) [2018] 1 SLR 271 at [110], upholding the High Court decision in Parakou (HC) at [121]–[122].

47 Certain classes of companies, for example, financial institutions, are excluded from the scheme of arrangement, judicial management and Singapore Model Law provisions.

48 ILRC Report at p. 140.

49 Section 211B(8) of the Amended Companies Act.

50 Section 211B(1) of the Amended Companies Act.

51 Section 211B(5) of the Amended Companies Act.

52 Section 211C of the Amended Companies Act.

53 EMAS Offshore Limited Singapore Exchange announcement (26 September 2017) http://infopub.sgx.com/FileOpen/20170929%20-%20EOL%20-%20Announcement%20re%20S211%20Order%20v1.ashx?App=Announcement&FileID=471850 (accessed on 24 May 2018).

55 Nam Cheong Limited Singapore Exchange announcement (30 October 2017) http://infopub.sgx.com/FileOpen/Application%20for%20Proposed%20Scheme%20of%20Arrangement%20-%2030%20Oct%202017.ashx?App=Announcement&FileID=475960 (accessed on 24 May 2018).

56 Hoe Leong Corporation Ltd. Singapore Exchange announcement (7 December 2017) http://infopub.sgx.com/FileOpen/Outcome%20of%20Moratoria%20Applications_Final.ashx?App=Announcement&FileID=481256 (accessed 24 May 2018).

57 Hyflux Ltd Singapore Exchange announcement (22 May 2018) http://infopub.sgx.com/FileOpen/HL%20-%20Announcement%2022%20May%202018%20final.ashx?App=Announcement&FileID=506928 (accessed on 24 May 2018).

58 See Pacific Andes at [68], [71] and [73].

59 Re: Empire Capital Resources Pte Ltd [2018] SGHC 36 at [100].

60 ILRC Report at p. 154.

61 Section 211H of the Amended Companies Act.

62 Debt Restructuring Committee Report at p. 26.

63 Hoe Leong Corporation Ltd. Singapore Exchange announcement (22 January 2018) http://infopub.sgx.com/FileOpen/HLC%20-%20Court%20approval%20of%20Scheme.ashx?App=Announcement
&FileID=485997 (accessed 24 May 2018).

64 Section 211E of the Amended Companies Act.

65 Section 211E(9) of the Amended Companies Act.

66 Re Attilan at [57].

67 Re Attilan at [60]–[61].

68 Re Attilan at [69].

69 Re Attilan at [69], [72].

70 See further at Re Attilan at [65]–[67].

71 Re Attilan at [50]–[51].

72 Re Attilan at [56].

73 ILRC Report at p. 84.

74 On developments in the common law, see further at Section III.iii of this chapter.

75 Re Zetta Jet at [22].

76 Re Zetta Jet at [23].

77 Re Zetta Jet at [23].

78 Re Zetta Jet at [25]–[26].

79 Re Zetta Jet at [34].

80 Section 377(3)(c) of the Companies Act.

81 Sections 377(3)(c) and 377(14) of the Companies Act.

82 The Straits Times, Bill to streamline insolvency framework to be introduced in 2018: K Shangmugam (24 August 2017) and Ministry of Law, 'Keynote address by Mr K Shanmugam at Singapore Insolvency Conference 2017' (24 August 2017) https://www.mlaw.gov.sg/content/minlaw/en/news/speeches/keynote-address-by-mr-k-shanumgam--minister-for-home-affairs-and.html (accessed on 9 May 2018).

83 SK Engineering at [41].

84 Diablo Fortune at [27].

85 Diablo Fortune at [77].

86 Diablo Fortune at [79].

87 Diablo Fortune at [81].

88 Diablo Fortune at [65].

89 The Ministry of Law, Public Consultation on Proposed Amendments to the Companies Act in respect of Shipowner's Liens (23 May 2018) https://www.mlaw.gov.sg/content/minlaw/en/news/public-consultations/Public-Consultation-on-Proposed-Amendments-to-Companies-Act-in-respect-of-Shipowners-Liens.html (accessed on 24 May 2018).

90 Diablo Fortune Inc v. Duncan, Cameron Lindsay [2018] SGCA 26.

91 Carpe Diem at [70].

92 Carpe Diem at [69].

93 The Straits Times, Otto Marine seeks judicial management (26 February 2018).

94 S&P Global Platts, Singapore bunker fuel supplier Panoil Petroleum placed under judicial management (30 October 2018) https://www.platts.com/latest-news/shipping/singapore/singapore-bunker-fuel-supplier-
panoil-petroleum-26829954 (accessed on 24 May 2018).

96 The Guidelines at introductory paragraph A.

97 Guidelines 7 and 8 of the Guidelines.

98 Ezra Holdings Limited Singapore Exchange announcement (13 March 2018) http://infopub.sgx.com/FileOpen/Ezra%20-%20Announcement.ashx?App=Announcement&FileID=492650 (accessed on 24 May 2018); and Ezra Holdings Limited Singapore Exchange announcement (2 April 2018) http://infopub.sgx.com/FileOpen/Ezra%20Ezra%20Announcement%20_Prayers%202%20to%205%20SUM%201195.ashx?App=Announcement&FileID=495336 (accessed on 24 May 2018); see also The Straits Times, Ezra gets nod here for cross-border bankruptcy protocol (14 March 2018).

99 Ezra Holdings Limited Singapore Exchange announcement (13 March 2018) http://infopub.sgx.com/FileOpen/Ezra%20-%20Announcement.ashx?App=Announcement&FileID=492650 (accessed on 24 May 2018).