Corporate insolvency in Malaysia is governed by the Companies Act 2016. There are five main corporate insolvency or restructuring mechanisms:
Corporate Voluntary Arrangements (CVA) is a procedure that allows a company to put up a proposal to its creditors for a voluntary arrangement. The implementation of the proposal is supervised by an independent insolvency practitioner who reports to the Court on the viability of the proposal.
Judicial Management (JM) allows a company, or its creditors, to apply for an order to place the management of a company in the hands of a qualified insolvency practitioner, a judicial manager. The moratorium applies automatically from the filing until the disposal of the judicial management application and also while the judicial management order is in force.
Schemes of Arrangements under Section 366 of Companies Act 2016 gives the Court the power to order a compromise, or arrangement, with creditors and members in the form of an approved debt-restructuring arrangement.
Receivership is what is known as an enforcement remedy provided under debenture to protect a debtors rights over the charged assets of a Company.
Winding-up/Liquidation can be either a voluntary or a compulsory court winding up and involves realising the assets of a company to cover its debt.
Court Appointed Receiver and Manager
The Malaysian courts may grant an order for an appointment of a Court Appointed Receiver and Manager to take over the affairs of a Company.
Voluntary Arrangement under Insolvency Act 1967
An individual debtor, before he is adjudged bankrupt, may propose a voluntary arrangement to his creditors and is required to appoint a qualified nominee to oversee and supervise the implementation of the voluntary arrangement.