The IRDA introduces new changes to the insolvency framework in Singapore
The Insolvency, Restructuring and Dissolution Act (the IRDA) commenced on 30 July 2020. The IRDA is an omnibus legislation that consolidates Singapore’s personal insolvency, corporate insolvency and debt restructuring laws into a single legislation. The IRDA will replace the Bankruptcy Act and the corporate insolvency and restructuring provisions in the Companies Act, each of which will be repealed. The IRDA also introduces new changes to the insolvency framework in Singapore.
Corporate debt restructuring
- A new out-of-court procedure to place a company in judicial management provided creditors agree to and support such an arrangement.
- New provisions to allow judicial managers to obtain third party funding for court action to unwind prejudicial transactions and avoid acts detrimental to creditors.
- New restrictions on the operation of ipso facto clauses in contracts. During the period of restructuring, contracting parties cannot terminate or amend or claim an accelerated payment or forfeiture of the term under any agreement with the company, or terminate or modify any right or obligation under any agreement the company, for the only reason that the company is insolvent or is undergoing restructuring proceedings. read more
Source: Nandakumar Ponniya and Zeming Liu – Baker McKenzie