Singapore Restructuring & Insolvency Yearbook 2023

Singapore Restructuring & Insolvency Yearbook 2023

By Smitha Menon, Lionel Leo, Stephanie Yeo, Joel Chng, Daniel Liu, Tan Kai Yun, Clayton Chong, Adnaan Noor, Eden Li, Muhammed Ismail Noordin (WongPartnership)


2023 was a monumental year for the development of Singapore case law on restructuring and insolvency.

In the past few years, the focus has been on legislative reform – the introduction of ”supercharged” restructuring tools in 2017, the commencement of the omnibus Insolvency, Restructuring and Dissolution Act 2018 (IRDA) in 2020, and the expansion of the Singapore International Commercial Court’s jurisdiction to hear restructuring and insolvency proceedings in 2022.

In 2023, it was the courts which maintained the steady drumbeat of Singapore’s march towards becoming a premier international restructuring hub, with a formidable string of cases clarifying the boundaries and testing the limits of the law.

Cross-border insolvency

On the cross-border insolvency front, a broad purposive approach was adopted in several cases applying the UNCITRAL Model Law on Cross-Border Insolvency (Model Law), helping to further the underlying legislative objectives of facilitating the co-ordination of cross-border insolvencies and the rescue of financially troubled companies.

In Ascentra Holdings, Inc (in official liquidation) v SPGK Pte Ltd [2023] 2 SLR 421 (Ascentra), the Singapore Court of Appeal recognised a foreign solvent members’ voluntary winding-up under the Model Law, clarifying that there is no requirement for a debtor company to be insolvent to obtain recognition. Ascentra signals a potential receptiveness to the recognition of solvent / pre-distress restructurings, and paves the way for foreign debtor companies to effectively restructure their debts in Singapore before they reach the precipice of insolvency.

Following the broad approach in Ascentra, the General Division of the High Court in Re Thresh, Charles [2023] SGHC 337 (Re Thresh) recognised the Bermudan winding-up of an insurance under the Model Law, even though the winding up was not commenced on the grounds of insolvency but due to serious non-compliances with mandatory regulatory requirements. Like Ascentra, Re Thresh avoided an unduly narrow interpretation of what qualified as a foreign proceeding eligible for recognition under the Model Law.

In Re Genesis Asia Pacific Pte Ltd [2023] SGHC 240 (Genesis), the court clarified that a debtor corporation can be its own foreign representative under the Model Law, thus having standing in its own capacity to apply for recognition. Reporting and other obligations may be imposed on the debtor to mitigate the risk of conflict between the debtor’s own interests and its duties as a foreign representative. The clarification provided in Genesis is useful for the recognition of debtor-in-possession proceedings (e.g., a scheme of arrangement or Chapter 11 reorganisation), for which there is usually no insolvency officeholder appointed over the company who can serve as the foreign representative.

Restructuring toolkit

The spate of crypto restructurings in 2023 has also spawned the use of innovative deal structures and elements which will have much broader application beyond the crypto space.

In Re Babel Holding Ltd [2023] SGHC 329 (see also Re Babel Holding Ltd [2023] SGHC 98), the court confirmed that a Singapore scheme of arrangement can pool the assets and liabilities among different entities within a corporate group to effect a global restructuring of the group. The pooling of assets and liabilities is referred to as “substantive consolidation”. Substantive consolidation is not permissible in every situation, but would be appropriate only where the affairs of the group companies are hopelessly intertwined, the legitimate interests of creditors are not unfairly overridden and the restructuring demonstrably benefits the affected creditors. The availability of substantive consolidation enhances the utility of the Singapore regime in restructuring corporate groups. It also represents a further step on the path laid in Re DSG Asia Holdings Pte Ltd [2022] 3 SLR 1250 which approved the use of deed poll structures to restructure a corporate group’s debts under a single scheme of arrangement.

In Re Zipmex Pte Ltd and other matters [2023] SGHC 88 (see our update here), the court approved the creation of an “administrative convenience” class of creditors (comprising about 67,000 customers with claims under $5,000) which would not have to vote on the proposed scheme, but could opt in to vote if they wished. The customers would receive full access to their crypto assets under the scheme. Through the creation of the “administrative convenience” class, the scheme company was able to push through a pre-pack scheme of arrangement after securing the approval of the supermajority (>75%) in value of its creditors, without having to obtain the approval of the majority in number of its creditors under the headcount test. The possibility of creating an “administrative convenience” class enables greater execution certainty in restructuring deals where the vast majority of debt is controlled by a small group of creditors.

Winding up and judicial management proceedings

Several cases involving winding up and judicial management proceedings have also given greater clarity and predictability to the law.

In Majestica Enterprises Ltd and another v Kams Singapore Pte Ltd (in compulsory liquidation) [2023] SGHC 250 (Majestica), the court reaffirmed the use of section 204 of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) as an avenue for raising litigation funding (see also Song Jianbo v Sunmax Global Capital Fund 1 Pte Ltd (in compulsory liquidation) [2022] SGHC 312). Section 204 IRDA enables a liquidator to seek a prospective court order granting priority to creditors who fund the costs of litigation (among other things). The benefit of seeking priority through section 204 of the IRDA, as compared to a sale or assignment of the company’s cause of action (the established way of raising litigation funding), is that the litigation funder can potentially obtain recovery not only from the fruits of the action, but also from other assets recovered by the liquidator. The court in Majestica laid out a list of factors to be considered in deciding whether to grant priority to litigation funding under section 204 of the IRDA, including the complexity and necessity of the proceedings which are being funded, the level of risk undertaken by the funding creditor, whether other creditors have been asked to provide funding and failed to do so, the public interest in encouraging creditors to provide funding, and any objections of other creditors or the Official Receiver.

In Founder Group (Hong Kong) (in liquidation) v Singapore JHC Co Pte Ltd [2023] SGCA 40, the Singapore Court of Appeal, building on its decision in AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co) [2020] 1 SLR 1158, clarified that a claimant would have no standing to bring a winding up application if, on a prima facie basis, the claim is governed by a valid arbitration agreement between the parties and falls within the scope of that agreement. This demonstrates how the courts will uphold the parties’ bargain to have their disputes arbitrated, rather than determined summarily through a winding-up application before the court.

In Loh Cheng Lee Aaron v Hodlnaut Pte Ltd [2023] SGHC 323 (see our update here) (Hodlnaut), the court held that a company’s cryptocurrency obligations to its creditors can be taken into account when assessing whether it is unable to pay its debts (which is often the primary ground for winding up a company). An earlier unreported decision Algorand Foundation Ltd v Three Arrows Capital Pte Ltd (HC/CWU 246/2022) (30 March 2023) (Algorand) had created some uncertainty as to whether a winding up application may be brought on the basis of a cryptocurrency debt, as the court there dismissed a winding up application that was based on an unsatisfied statutory demand denominated in the cryptocurrency USD Coin. The reasoning in Algorand was that a debt denominated in cryptocurrency was not a money debt capable of forming the subject matter of a statutory demand under section 125(2)(a) of the IRDA. The court in Hodlnaut clarified that the holding in Algorand was confined to section 125(2)(a) of the IRDA (which creates a statutory presumption of insolvency if a statutory demand is not satisfied), whereas section 125(2)(c) of the IRDA (which assess the solvency of a company on a holistic basis) encompasses a wider assessment of cryptocurrency assets and liabilities. The implication of Hodlnaut is that a cryptocurrency creditor who is able to prove as a matter of fact that the debtor company is unable to fulfil its cryptocurrency-denominated liabilities or obligations can successfully wind up a company under section 125(2)(c) of the IRDA.


The flourishing jurisprudence reflects the growth of the overall restructuring and insolvency ecosystem in Singapore. Some of the cases discussed above also hint at how market participants are leveraging on the robust legal framework to execute complex restructurings (as seen in the crypto cases Babel and Zipmex) and cross-border asset recovery and tracing (as seen in Ascentra and Re Thresh). It will be interesting to see how far the envelope will be pushed in 2024.

* This article was originally published by WongPartnership LLP on 2 January 2024. A copy of the original article can be found here.