In the previous article, we explained that you may fend off creditors from winding up your company by applying for a Judicial Management Order while your company rehabilitates financially. In this post, we will explain the effects of a Judicial Management Order, including its effects in light of the COVID-19 situation.
The winding up of a company is a process where the company ceases to exist and its assets are seized and realised. Any remaining monies will be used to pay off the creditors of the company, the expenses and costs of the winding up, and any balance thereafter will be dispensed among the shareholders of the company.
Another way for companies to avoid winding up is to negotiate compromises and settlements with all its creditors. However, it is not easy to obtain the agreement of each and every creditor as they may be afraid of being disadvantaged in terms of their priority in the repayment process.
Suppose you just went through a long, tiring, expensive arbitration overseas and finally the arbitral tribunal issues an award in your favour, only to realise the other party (let’s call him the “debtor”) has their assets in Singapore, so enforcing the award in the seat of arbitration is pointless. Now, you want to enforce the award in Singapore and get the debtor to pay up.
Let’s suppose you have a foreign judgment against someone residing in Singapore (let’s call this person the “debtor”) and you want something to be done about that judgment. Maybe the debtor owes you money now, or maybe you want to stop the debtor from restarting the case in Singapore. The point is, you want your foreign judgment to be given the same legal effect as a judgment made in Singapore by the courts here, so you’re wondering how you will go about it.
If you are a creditor of a company which is insolvent, you may petition to wind the company up to realise your debts.
