Micro and small companies will be able to use a “Simplified Insolvency Programme” under amendments to Singapore’s Insolvency, Restructuring, and Dissolution Act 2018 (IRDA).
The Insolvency, Restructuring, and Dissolution (Amendment) Act introduces temporary new prepackaged restructuring and liquidation options (the Simplified Insolvency Programme) for eligible micro and small companies in the current coronavirus (COVID-19) environment. The Simplified Insolvency Programme aims to provide simpler, faster, and lower-cost proceedings for eligible companies, and will be in place until 28 January 2024, which is three years after the date of commencement (29 January 2021) of the relevant provisions of the Act..
A company is eligible under the Simplified Insolvency Programme if:
Applications for eligibility must be made to the Official Receiver. The Act provides for circumstances where the Official Receiver will deem applicants to be unsuitable for the Simplified Insolvency Programme. These include situations where the applicant company is already under an existing insolvency process (i.e., it is the subject of a winding up order), it is in judicial management, or it has already applied for and/or received moratorium protections under existing scheme of arrangement provisions.
In addition, the Official Receiver may also deny acceptance if:
The Simplified Insolvency Programme introduces several new initiatives aimed at making prepackaged schemes of arrangement more accessible and less costly to eligible companies. The Singapore Ministry of Law has issued a press release summarizing these new, streamlined, provisions as follows:
The amendments also introduce a new simplified winding up programme.
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 As compared with the threshold for a regular scheme of arrangement of 75% in value and a majority in number of the company’s creditors.
 Ipso facto clauses are provisions that allow a party to terminate or modify the operation of a contract (including accelerating payment) upon the occurrence of a counterparty's insolvency, financial conditions, or restructuring.