High Court Issues Key Decisions on Schemes of Arrangement

In the recent decision of the Malaysian High Court in Re Top Builders Capital Bhd & Ors [2022] MLJU 1, Ong Chee Kwan JC reaffirmed certain principles for the sanction of a scheme of arrangement (“SOA“) and also decided on some novel issues:

1. the classification of creditors;
2. the threshold test for disclosures in the explanatory scheme;
3. the validity of virtual scheme meetings;
4. the extension of time for submission of proofs of debt (“PODs“);
5. the inspection of other scheme creditors’ PODs; and
6. the discounting of scheme creditors’ votes.

This Update provides a summary of the above principles.