In brief 

Q. So what is an overview of judicial management? 

A. When a corporation becomes insolvent, Malaysia has historically resorted to liquidation or winding-up processes. The Companies Act 2016 (the Act) has incorporated several restructuring tools, including judicial management as an alternative to liquidations, into Malaysia’s insolvency environment. 

Who can apply?

Example: The court decided that the party claiming to be a creditor has standing to petition for judicial management in the matter of Spacious Glory Sdn Bhd v Coconut Three sdn Bhd [2020] MLJU 1188. The term ‘contingent or prospective creditor,’ according to the Court, refers to a situation in which the corporation may be exposed to a current responsibility based on the occurrence of a future event or at a future event. The term ‘creditor’ must refer to anyone who has a financial claim against the company. On the balance of probability, the applicant had established that he was a creditor. 

What tests are required to be completed? 

Example: In the matter of Spacious Glory Sdn Bhd v Coconut Three Sdn Bhd [2022] 7 MLJ 76, the court will now evaluate whether issuing the order is likely to achieve one or more of the objects listed in Section 405(1)(b) of the Companies Act 2016. The court next addressed the applicants’ argument that the respondent had allegedly failed to present a reasonable solution to the issues at hand, and that as a result, the respondent’s failure to hire an attorney to oppose the petition could not be dismissed. In this matter, the judgement of the Court of Appeal in the case of CIMB Islamic Bank Bhd v Wellcom Communication (NS) Sdn Bhd & Anor [2019] was used.