Insolvency

Moratorium obtained to prevent major creditor from winding up our client

July 3, 2020

We recently represented a client in a moratorium application pursuant to Section 211B of the Companies Act, to prevent a major creditor from winding them up.

Our Client is a telecommunications systems engineering and integration company providing telecommunication infrastructure for critical industrial environments. They are part of a group of companies with regional and international offices. Due to the recent Covid-19 pandemic, our client has experienced a liquidity crunch, which resulted in one of the local banks, which is a major creditor of our client, commencing winding up proceedings.

We swiftly filed an application in the Singapore High Court under Section 211B of the Companies Act soon after the bank commenced winding up proceedings. We worked with all the other creditors to obtain support for our client’s application and successfully obtained a moratorium preventing any creditors from winding up of our client or any other legal proceedings being commenced or continued against our client. This will allow our client time and space to restructure their debts and to resolve their temporary liquidity issues.

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