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Corporate Insolvency Services

Corporate insolvency in Malaysia is governed by the Companies Act 2016.

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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.

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