1. THE ROLE OF INSOLVENCY PRACTITIONERS
IN INSOLVENCY
PROCEEDINGS (SINGAPORE) 1
Not to be reproduced or disseminated without permission.

2. TYPES OF INSOLVENCY PROCEEDINGS
RECEIVERSHIP
To preserve asset(s) secured to a secured creditor, e.g. contract proceeds or a mortgaged property. This is usually pursuant to an instrument, e.g. debenture. The power to appoint a Receiver & Manager (“R&M”) is common in security arrangements.
JUDICIAL MANAGEMENT
To (1) rehabilitate a company into a going concern (in whole or part), (2) obtain approval of a Scheme of Arrangement, and/or (3) achieve a more advantageous asset realisation compared to liquidation. A Judicial Manager (“JM”) takes over the company’s directors.
LIQUIDATION
Aim is to administer an organised winding-down of a company’s affairs, a fair distribution of assets and a dissolution of the entity. Liquidation may be “voluntary” – by members (“MVL”) or by creditors (“CVL”) – or by Court on a “compulsory” basis (“CWU”).
SCHEME OF ARRANGEMENT
Aim is for a company to propose a compromise or arrangement (a “Scheme of Arrangement”) with creditors and/or shareholders. The Court’s assistance is sought to allow a company to negotiate this effort to rehabilitate. The directors remain in control.

3. RECEIVERSHIP Who may apply Duties/Powers Qualifications Effect
Creditor, by instrument, e.g. debenture
Creditor, by Court Order
Appointment may exclude Manager role
Duties/Powers
If appointed by instrument, R&M is the Company’s officer (R&M has duties similar to director)
If appointed by Court or without Manager role, R&M is not an officer
Announce appointment
Take charged property into custody/control
Qualifications
Approved Liquidator
Not undischarged bankrupt
Not eligible: Company’s auditor, mortgagee, or mortgagee’s director, secretary or employee
Effect
Typically an event of default in banking contracts, construction & building contracts, under security arrangements
Duties/Powers
Report every 6- months on receipts, payments, debt to creditor, estimated value of charged assets
If appointed pursuant to floating charge, R&M must pay preferential debts before claim by floating charge holder

4. JUDICIAL MANAGEMENT Who may apply Duties/Powers Qualifications Effect
Directors (by resolution)
Company (by shareholders)
Creditors (including contingent or prospective creditors)
Duties/Powers
JM is the Company’s officer and agent
Personal liability on contracts entered/ adopted during appointment
Announce appointment
Take into custody and manage the Company’s affairs, business and property
Qualifications
Public Accountant
Effect
No winding-up
No receivership
JM is for 180 days
Moratorium against
legal proceedings
execution
security over property, re-entry/ forfeiture of lease
retention of title
repossession under hire- purchase/leasing
Duties/Powers
60 days to present Statement of Proposals
Power to acquire rescue financing and apply to Court for super-priority
JM to implement proposal if approved
JM to apply for discharge or extension of JM order

5. LIQUIDATION Who may apply Duties/Powers Qualifications Effect
MVL: shareholders’ resolution when Company is solvent
CVL: directors’ resolution first; then creditors and shareholders
CWU: by Court on application of:
creditor
shareholders JM
Minister
Duties/Powers
If appointed by directors in CVL or by shareholders in MVL, duties as officer (director)
If appointed by creditors in CVL or by Court, not an officer
Announce appointment
Take property into custody/control
Investigate affairs and report fraud
Qualifications
Approved Liquidator
Not undischarged bankrupt
Not convicted of fraud/dishonesty
Not indebted to a related company >S$2,500
MVL/CVL: unapproved liquidator, officer and related individual can act
Effect
Moratorium against legal action, execution, etc.
Creditors file Proofs of Debt
Typically an event of default in contracts
Duties/Powers
Pursue asset recovery
Adjudicate Proofs of Debt
Effect distribution of assets
Report unfit conduct of directors
Submit record of receipts/payments
Apply to dissolve Company and for discharge/release

6. SCHEME OF ARRANGEMENT (DIP)
Who may apply
Company
Liquidator
Creditor
Shareholder
Holder of units of shares in Company
Duties/Powers
Company’s duty to:
classify creditors
make full disclosure
assess Proofs of Debt
seek approval of super-priority for rescue financing
meet pre-pack req’mts
issue notices/ clear explanatory statement
Qualifications
No specific requirements
Usually an approved liquidator
Effect
Company remains in control
Moratorium against
legal proceedings
execution
security over property, re-entry/ forfeiture of lease
retention of title
repossession under hire- purchase/leasing
Duties/Powers
Chairman of creditors’ & shareholders’ meetings has duty to conduct meeting and report to Court
Court’s power to:
cram-down
order re-vote
approve/review
Scheme Manager’s duty to implement terms of Scheme

7. RAJAH & TANN ASIA Nigel Pereira > 750 fee earners
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