Comparative legal analysis on the viability of judicial management on insolvent residential developer companies in Malaysia, The Republic of Singapore and The United Kingdom

Md Dahlan, Nuarrual Hilal (2015) Comparative legal analysis on the the viability of judical management on insolvent residential developer companies in Malaysia, The Republic of Singapore and The United Kingdom. Malayan Law Journal, 2 (20). pp. 1-15. ISSN 0025-1283

Abstract

Recently, the corporate law reform committee (‘CLRC’) operating under the companies commission of Malaysia (‘CCM’) has recommended that judicial management (‘JM’) be introduced in Malaysia as one of the ways to deal with corporate insolvency matters. The application for appointment of judicial manager may be made by the company itself, the directors or the creditors. The judicial manager is armed with a moratorium power against any action taken which may be commenced by the creditors and others to ensure that he can effectively carry out his duty. The moratorium power will enable him to prepare and implement the approved restructuring plan for the benefits of the insolvent company and its creditors.This paper aims to elaborate the CLRC’s recommendations on JM and study its strengths and weaknesses particularly in dealing with the problems of failed residential projects of insolvent residential developer companies. This paper is also a result of research conducted through a comparative legal research methodology. Two jurisdictions, viz the Republic of Singapore and the United Kingdom have been selected for comparative analysis over their respective laws and practices on JM. Further, this comparative study is to investigate, identify and find the respective jurisdictions’ strengths and weaknesses on JM, which Malaysia can learn from particularly in the face of the failed residential projects’ problems. This paper finds that the recommendation by the CLRC for the appointment of judicial manager is commendable. Nonetheless, it is submitted that, in the insolvency management of insolvent residential developer companies with failed residential projects, the judicial manager who is armed with certain statutory and legal powers still cannot fully provide comprehensive solution in dealing with the rehabilitation of failed residential projects and cater to the rights of the aggrieved purchasers. Equally, this paper suggests certain proposals to improve the corporate rehabilitation mechanism carried out by the judicial manager in insolvency Administration involving insolvent residential developer companies whose residential projects failed.In the course of carrying the JM, this paper also suggests certain ideas on how to protect the rights and interests of the aggrieved purchasers in failed residential projects.

Keywords: Failed Residential Projects; Judicial Management (‘JM’); Rights of Aggrieved Purchasers; Rehabilitation; Malaysia.

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