The new regulatory regime for licensed insolvency practitioners came into effect from 30th July 2020. It consolidates the corporate insolvency jurisdiction and personal insolvency regimes while establishing a new regulatory regime that will be followed by insolvency practitioners ahead.
This new act involves considerable amounts of changes in the corporate insolvency laws of Singapore, along with several personal insolvency provisions. It aligns procedures and sets some common principles under single law while minimizing uncertainty and rationalizing existing inconsistencies.
The amended act can be considered as a wider effort to improve the corporate debt restricting regime in Singapore that could further extend better support to the stakeholders, creditors and companies. As the insolvency laws are now consolidated to a single piece of legislation, it could enhance the accessibility and clarity to the clients and advisers.
The regulatory regime that is introduced recently may impose minimum qualification criteria along with few conditions on renewal and grant of licenses. This new framework also place also puts emphasis on disciplinary actions for officeholders in association with the breaches in insolvency practices and their conduct. The company is also allowed to present itself for judicial management, but it is necessary to ensure that the majority of creditors agree to it. Once the company is placed under judicial management, it will continue operations in a similar manner but as per the supervision of the court.
The licensed Singapore liquidator can guide new business owners better on these procedures to avoid any trouble in the process.
As per the new rules, only licensed insolvency practitioners will be able to work as liquidators, receive of a corporation or judicial manager. This new regulatory system will be administered by the public trustee’s office under the Ministry of Law. Other than this, the act also introduces a new set of restrictions on the contractual determination. These clauses permit modification or termination of the contract on the occurrence of any specified trigger event.
This new act is going to restrict the counterparties’ ability to amending or terminating an agreement. It will also handle the process of claiming accelerated payment as per the agreement with the distressed company. With this regulation, the counterparties will be allowed to exercise contractual rights over various substantive grounds, including non-performance or non-performance or non-payment by a distressed company. But at the same time, the counterparty is allowed to submit a case in the court involving a declaration that respective restriction is not applicable to it.
The restrictions mentioned in the regulations are intended to provide restructuring services for a distressed company. If you are looking for such kind of services, it is advised to go ahead with a licensed insolvency practitioner that can guide you throughout the process.
It is expected that this new act will allow financially distressed companies to avail new tools for restructuring and rehabilitating their business while handling the debts carefully. The licensed Singapore liquidator can handle the liquidation process easily as per the conditions mentioned in the new regulatory regime.