OUR SERVICES
Our Exclusive Services
We assist companies with financial or insolvency challenges, either at the request of the company itself or by the parties of interests such as lenders, creditors, debtors, shareholders, etc. We offer a full range of corporate recovery, restructuring & insolvency services to cater the needs of the parties concerned.
Here is how we can help you:
- We provide rescue solutions to resuscitate underperforming companies.
- We work together in potential revival of a company through support of white knight.
- We work together with troubled or underperforming companies that have no basis of revival and the possibility of insolvency or liquidation.
- We act as administrator of the company in the case of insolvency and receivership.
- We act as private liquidator generating higher recovery rate and within a shorter time frame as compared to the Official Receiver.
- We assist in realisation of assets and distribution to creditors.
- We advise on various ways to exit a business.
Snapshots of our services are as below:
Corporate Rescue & Restructuring
Insolvency Options - Liquidation / Winding-up
Other Corporate Recovery Options
Corporate Rescue & Restructuring
Companies will endeavor to resolve their financial difficulties at their best effort by using informal rescue methods such as negotiating with creditors, cutting costs, disposal of unused assets, etc. These informal rescue options are advantageous if carried out early and may assist the companies to recover. It is only when situation gets beyond their control that they will turn to formal rescue mechanisms which are costlier and involve complicated legal procedures.
Corporate Rescue Mechanism (“CRM”)
Corporate Rescue Mechanism provisions under Division 8, Part III of the Companies Act 2016 together with the Companies (Corporate Rescue Mechanism) Rules 2018 came into force on 1 March 2018.
There are 2 types of corporate rescue mechanisms:
a) Corporate Voluntary Arrangement (“CVA”); and
b) Judicial Management (“JM”)
The objectives are to assist company in financial difficulties with a sustainable ongoing business to be rehabilitated without interference from the creditors rather than taking the last resort to wind-up or liquidate the company.
Corporate Voluntary Arrangement
CVA core purpose is to assist in rehabilitating private companies that have not created any charge over its properties or any of its undertakings.
It is where the company enters into a compromise or arrangement with its creditors under the supervision of an insolvency practitioner with minimal Court intervention.
Judicial Management (“JM”)
JM is a rescue option for the company which is unable to pay its debts but has reasonable probability of rehabilitating.
An insolvency practitioner, known as Judicial Manager is appointed by the Court to run the company and supervise the restructuring plan of the company.
Upon filing of JM application to the Court, a moratorium exists over pending or on-going actions by creditors against the company.
Scheme of Arrangement (“SOA”)
SOA is a scheme supervised by the Court and is available to any company in financial distress. It can be a corporate restructuring or debt restructuring exercise.
SOA enables a company to formalise its compromise arrangement with its creditors. In SOA, the director of the company stays in power and the Company may apply to Court for a restraining order to restrain all legal proceedings against the company. A scheme manager is usually appointed by the Court to oversee the process.
SOA may be initiated by :
LIQUIDATOR OR JUDICAL MANAGER
SUMMARY of CORPORATE RESCUE & RESTRUCTURING OPTIONS
| Options | Initiated by | Process Overseen By | Approval |
| Corporate Voluntary Arrangement | Directors/Creditors | Nominee | 75% in value of creditors and simple majority of members |
| Judicial Management | Directors/Creditors | Judicial Manager | 75% in value of creditors |
| Scheme of Arrangement | Directors/Creditors/Liquidators/Judicial Manager | Scheme Manager | 75% in value of creditors |
Insolvency Options – Liquidations / Winding-Up
Court Liquidation / Compulsory Winding-up
Court Liquidation / Compulsory Winding-up is usually initiated by creditors or aggrieved shareholders.
It is usually the last resort that the creditors, shareholders, (or personal representatives of a deceased shareholder or the trustee in bankruptcy) opt to when all means of recovering or negotiation had failed.
Upon Court Order for wind-up, liquidator will be appointed to administer the liquidation of the Company in accordance to the Companies Act 2016.
Creditors’ Voluntary Liquidation (“CVL”)
(Company is insolvent)
Company usually resorts to CVL when the directors foresee that the company may fall under insolvent trading soon with no viable business prospect thus proposed to resort to CVL to minimise its risk and exposure.
In CVL, the company is insolvent which means it has liabilities more than assets. Therefore, debts may not be paid in full to the creditors.
Members’ Voluntary Liquidation (“MVL”)
(Company must be solvent)
MVL is liquidation of a solvent company where its assets are more than liabilities.
MVL is the preferred winding-up method for directors and shareholders that wish to have transparent closure of a company especially one that has been very active before; or a company that has surplus assets for distribution back to shareholders.
Directors and shareholders also resort to MVL when the company has served its purpose or no longer wishes to continue business.
Other Corporate Recovery Options
Receiver / Receiver & Manager (“R&M”)
Receivership is one of the remedies granted in the Debenture.
In the of event of default by the company, the bank and/or secured creditor may do the following:
- Appoint a receiver to repossess the charged assets
- Appoint a receiver & manager to take control of the company and its assets
Monitoring Accountant /Special Manager
A Monitoring Accountant or a Special Manager is appointed where there is a need for an independent observer or control in place.
The role of a Monitoring Accountant or Special Manager varies based on assignments but will usually include monitoring and reviewing of specific business area and at times also act as a co-signatory for payments.
Asset
Realisation
Asset realisation is a way of cashing out via disposal of assets or divestment of businesses to reduce the financial burden or conserve the resources of a company.
It can be done via tender exercise where the seller has the option to choose the offer price and the buyer from offers received.
Independent Business Review
An independent business review is conducted to identify problems in an underperforming or troubled company.
Viable options will be developed and proposed to resolve the issues identified.