Singapore to update restructuring and insolvency framework to better serve economy, businesses
One of the reforms include making sure a judicial management is not a precursor to liquidation.
Singapore plans to overhaul its restructuring and insolvency framework to better support the economy and businesses, according to Minister for Law Edwin Tong. The current judicial management process, which aims to rescue viable businesses, has often led to liquidation instead, adding unnecessary time and costs. The amendments to the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) will clarify that judicial management is a rehabilitative process and require applicants to demonstrate how it will benefit the company.
A cross-class cramdown, allowing court approval of restructuring plans rejected by majority creditors, will also be made more accessible. Singapore will adopt three United Nations Commission on International Trade Law (UNCITRAL) model laws to enhance cross-border cooperation and legal certainty.
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