In Logistics Construction Pte Ltd [2024] SGHC 58, the Singapore High Court considered whether a company should be placed under judicial management and whether the judicial manager nominated by the company should be appointed. In particular, the Court examined the standing of a contingent creditor to object to the nomination of a judicial manager, and the operation of the provision allowing a majority of creditors to make such opposition.
The applicant applied to be placed under judicial management pursuant to a court order made under Part 7 of the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) (“IRDA“). The applicant also nominated one Ms Tan to be appointed as the judicial manager. However, Buildforms, which the applicant claimed to be a disputed creditor, opposed the nomination of Ms Tan. The Court allowed the applicant’s application to be placed under judicial management, and for Ms Tan to be its judicial manager.
Notably, the Court considered section 91(3) of the IRDA, which provides the specific procedure for the appointment of a judicial manager. It provides that the Court may reject the nomination of the applicant and appoint another person in place of the applicant’s nominee, and that a majority in number and value of the creditors (including contingent or prospective creditors) may be heard in opposition to the nomination (section 91(3)(d)).
The Court considered two interpretations of “the majority” in the requirement in section 91(3)(d), and was of the view that “the majority” must be determined by reference to all of the applicant’s creditors, as opposed to all of the applicant’s creditors who expressed their positions on the applicant’s nominations.
On the facts, the Court found that Buildforms did not have standing to be heard in opposition to the applicant’s nomination of a judicial manager. While Buildforms was a contingent creditor, it was not part of the majority in number and value of such creditors, as it had gathered the support of only five other creditors whose total debts amounted to less than half of the total value of claims that the applicant faced.
Timothy Ang from the Commercial Litigation Practice and Lye Yu Min from the Restructuring & Insolvency Practice represented two non-opposing creditor banks in this application.
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