When a company enters financial trouble, the Singapore restructuring and insolvency framework provides a number of avenues through which the rights of the company’s creditors may be addressed. In Yap Sze Kam v Yang Kee Logistics Pte Ltd [2023] SGHC 43, the Singapore High Court was faced with a scenario where it had to consider the interplay between the judicial management regime and the receivership regime. The case involved bondholders, with a debt of about S$110 million, who had appointed receivers over the majority of the shares of the relevant companies, thus achieving effective control of the companies. However, a creditor and a founder of the companies sought to appoint judicial managers over the companies instead.
The Court declined to appoint judicial managers in the circumstances, finding that it would not achieve the statutory purposes of judicial management, and would not be in the best interests of the creditors as a whole. The decision demonstrates the areas where conflict may arise between the receivership and judicial management, and how the Court may resolve such tensions by addressing the interests of the various groups of creditors.
Jansen Chow of Rajah & Tann Singapore LLP successfully represented one of the largest bondholders in this matter.
For more information, click here to read the full Legal Update.
