MahWengKwai & Associates’ Online Talks are presented by video conference to inculcate knowledge and awareness for our clients, potential clients and in-house counsel.
On 6 April 2020, our Senior Associate, Cassandra Nicole Thomazios together with Associates, Tommy Wong and Felicia Tang, from the firm’s Corporate Department spoke on “Rescue Mechanisms for Distressed Companies – Corporate Voluntary Arrangement”. The talk focused on Corporate Voluntary Arrangements for private limited companies and took place in the context of the new Companies Act 2016.
In the presentation, Felicia provided an introduction on corporate rescue mechanisms under the Companies Act 2016 which included a brief overview of both judicial management and corporate voluntary arrangement. Tommy gave an insightful overview of the key requirements and the procedure in a corporate voluntary arrangement (“CVA”), which included the appointment of a nominee, composition of a proposal and the moratorium period. It was also highlighted that the moratorium period under corporate voluntary arrangements offers private companies time to negotiate with their creditors and additional time to carry on their businesses to facilitate the recovery from debts owed.
Finally, Cassandra commented on key points, practical steps and overview for financially distressed companies to consider before embarking on a CVA. Cassandra also addressed questions from participants on the nature of a CVA exercise and voting rights by creditors and members of a company undergoing a CVA.
Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.