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Practice

Corporate Restructuring & Insolvency

Judicial
Management

 

Public Companies in Financial Distress
(PN17 & GN3)

Corporate Voluntary Arrangement
 

Privatisation & Delisting on Bursa Securities
 

Scheme of Arrangements

 

Creditors' Rights &
Representation

 

Company Winding Up & Liquidation
 

Bankruptcy

 

Judicial Management
Court hearing

Judicial management (JM) is a method of debt restructuring where an independent judicial manager is appointed to manage the affairs, business, and property of a company under financial distress. The company is also temporarily shielded from legal proceedings by third parties, giving it the opportunity to rehabilitate.

JM offers a way to rescue companies that are viable for financial rehabilitation through the assistance of a Judicial Manager by giving the company breathing space via its wide moratorium and protection from legal proceedings. In other words, it preserves the investments for shareholders, jobs for employees of the company, and monies for creditors.

HAEME LEW will represent the clients to obtain a court order in ensuring the company is protected from any legal challenges and ensuring the company will be able to survive. We also will conduct a legal due diligence exercise against the company ensuring that the health of the company could be properly assessed in order to convince the court that the company shall be granted a JM Order.

Corporate Voluntary Arrangement
Image by Evangeline Shaw

A company in financial distress may enter into a binding compromise or arrangement with its creditors, known as the Corporate Voluntary Arrangement (CVA), without the need for the compromise or arrangement to be approved by the Court. This CVA only applies to private companies.

Upon commencing a CVA, a moratorium will come into force, allowing a viable, but struggling company the opportunity to repay its debts over a period of time to be agreed in the CVA.

HAEME LEW has a vast experience in corporate restructuring, especially on JM and CVA will assist the clients in ensuring that their legal rights are well protected, including conducting relevant due diligence exercises in assessing the viability of the CVA process.

Scheme of Arrangement
Bankruptcy Filing

Scheme of Arrangement (SoA) is a court-approved compromise or arrangement made between the company and its creditors, where the company may persuade its creditors that it is in their interest to accept a compromise of their debts.

The entire process requires court involvement. Initiating an SoA requires the applicant to seek an order from the court to convene meetings of the members and various classes of creditors of the company. Any SoA that has obtained the required voting majority still needs to be approved by the court so as to be given binding effect.

HAEME LEW assists our clients in ensuring that their application for the SoA at the high court will always run smoothly and efficiently. 

Different to JM and CVA, the SoA does not grant an automatic moratorium against any legal proceeding against a company under SoA. As such, HAEME LEW will ensure the rights of the company are protected by applying a restraining order to restrain all creditors or third parties from commencing or continuing any legal action against the clients.

Company Winding Up & Liquidation
Image by Tim Mossholder

There are two types of winding-up, namely, compulsory and voluntary winding-up.

 

In general, winding-up is the process of liquidating assets of a company, paying its obligations or liabilities, distributing remaining assets or monies to shareholders and thereafter dissolving the company as a legal entity.

Our experienced lawyers not only able to advise our clients on compulsory and voluntary winding-up, but we also represent our clients in defending their companies from being wound up. We have successfully defended many companies from being wound up either via Fortuna injunction, or several other legal methods.

Public Companies in Financial Distress (PN17 & GN3)
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Generally, most companies fall into PN17 (Main Market issuers) or GN3 (ACE Market issuers) status because their shareholders’ funds are less than 25% of their paid-up capital, winding-up action is being taken against their subsidiaries or associated companies, or their auditors have expressed a disclaimer opinion.

 

As an experienced team of lawyers advising our clients in restructuring their debts and saving the company, we will be together with other advisors appointed by the PN17 company to submit a regularisation plan to the Securities Commission Malaysia for approval within 12 months of the date of admission into PN17 status.

We also will ensure that all creditors and any third parties of the PN17 company will not be able to initiate or continue any legal proceeding against the company ensuring that the company be able to restrategise its recovery plan and getting help from a white knight as a saviour.

Privatisation & Delisting on Bursa Securities
Image by Luke White

One of the consequences a public listed company being delisted on Bursa Securities Trading Board is shareholders will be holding shares which are no longer quoted and traded on Bursa Securities, however the company is still able to continue its operations and business and proceed with its corporate restructuring and its shareholders can still be rewarded by the company’s performance.

Our task in assisting companies being delisted from Bursa Securities is equally major with other advisors such as financial advisor. We assist our clients in their debt restructuring and corporate reorganisation ensuring that their transition from a public listed company to an unlisted public company or private company is run smoothly and efficiently. 

Companies that are interested to privatise their status from being a public company will also be assisted by us in ensuring compliance and the transition could be conducted without any legal implications especially opposition by the creditors and financiers. 

Creditors' Rights & Representation
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Creditors' rights are equally important during corporate rescue mechanisms or liquidation of a company. Many creditors are unaware of their rights against companies that ate under financial distress and eventually will just submit themselves to whatever liquidators, judicial managers or official receivers have decided.

Not all decisions made by liquidators, judicial manager, or official receiver cannot be challenged. There many situations where a liquidator or official receiver has exceeded his authority in managing a liquidated company. We have successfully represented numerous creditors in challenging against the decision or conduct made by liquidators, judicial managers, and official receivers.

Creditors representation at the very stage of a winding up, liquidation, judicial management, scheme of arrangement or even corporate voluntary arrangement is very crucial. We will represent our creditor clients in ensuring their rights are fully protected and will not be intimidated by any person.

Our clients need not to worry about their representation at the creditors meeting anymore.

Bankruptcy
Image by Melinda Gimpel

Our Team provides a variety of bankruptcy-related services, representing both debtors who are attempting to resolve financial issues and creditors whose accounts receivable are at risk due to someone else’s bankruptcy.

 

While bankruptcy is often viewed as a matter of filling out forms, it is actually a complex legal process that can easily go wrong if the process is not guided by someone with an intimate knowledge of its complexities and possible pitfalls.

 

Our lawyers have the experience necessary to successfully advise and represent our clients in the bankruptcy proceedings that may impact their business.