Liquidating kazakhstan company

Posted by / 09-Oct-2020 14:34

Liquidating kazakhstan company

The proposal for a corporate voluntary arrangement has to be accompanied by a statement of an insolvency practitioner who has agreed to act as a nominee indicating whether or not, in his or her opinion, the debt restructuring proposal has a reasonable prospect of being approved and implemented and whether the company is likely to have sufficient funds available for the company during the proposed moratorium to enable the company to carry on its business.The process of corporate voluntary arrangement commences when the applicant, who may be the directors of the company, the liquidator or a judicial manager, lodges a proposal for the voluntary arrangement with the Court, whereupon a moratorium on actions by creditors commences automatically.The only formal corporate rescue process currently available in Malaysia is the scheme of arrangement under section 176 of the Companies Act 1965.The provisions in section 176 are not confined to debt restructuring of companies in financial distress, but, generally, are available to adjust the rights of members and creditors, reorganize the share capital of the company or perform a reconstruction or merger in the case of a group of companies.The application for a restraining order became open to abuse by companies without any viable proposal for a scheme of arrangement, whether by way of a deferred payment plan or a compromise.Section 176 also allows the existing management to continue in management without adequate protection for creditors against dissipation of assets and inappropriate application of cash resources.Not surprisingly, it is also at this stage of proceedings that a company may seek an ex-parte order to restrain creditor actions, and this provision was for a time, notoriously misused to achieve temporary reprieve from creditor actions.

For example, in the consultation paper released by the Corporate Law Reform Committee prior to the drafting of the Companies Act 2016, there was no consideration as to whether Malaysia ought to adopt some form of the UNCITRAL Model Law on Cross Border Insolvency, which would have made it one of the first countries in this region to do so.Procedurally, the company first applies to the Court to convene a meeting of the creditors or classes of creditors.If a majority in number representing 75% in value of the creditors or class of creditors present and voting approves the scheme, the company may then report this result to the Court in a subsequent application to the Court for approval of the scheme.It also modifies the existing law relating to schemes of arrangement.The Companies Act 2016 is anticipated to come into effect in late 2017.

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Overview of the insolvency reforms made by the Companies Act 2016 Under existing Malaysian insolvency laws, the usual outcome in the event of corporate insolvency is receivership or liquidation.