Singapore’s omnibus Insolvency, Restructuring and Dissolution Act 2018 comes into force
30 July 2020
Singapore's long awaited omnibus Insolvency, Restructuring and Dissolution Act 2018 (IRDA) came into force on 30 July 2020.
While substantially a consolidating statute preserving most of the provisions that have been collated under its ambit, key changes have been made to certain aspects of Singapore’s corporate insolvency and restructuring regime. These enhance its attractiveness as a regional hub for corporate restructurings and insolvencies. In addition to establishing a new licensing and regulatory framework for insolvency practitioners, these other changes are also of equal, if not more, significance:
- Introducing a new stay on the use of ipso facto clauses in certain situations;
- Allowing for a company to be placed under judicial management by way of creditors’ resolution instead of by a court order;
- Extending liability for wrongful trading; and
- Permitting a liquidator or judicial manager to assign the right to bring an action under the various avoidance provisions and insolvency offences to third party funders.
We discuss the noteworthy changes in greater detail in this update.