Articles

Introduction Financial distress does not necessarily mean the end of a business. In Malaysia, several legal mechanisms exist to allow viable companies to restructure their obligations and stabilise operations. Understanding these options allows directors to take early, informed steps toward recovery. Key Corporate Rescue Options Judicial Management A court-supervised process where a judicial manager is appointed to take control of the company with the aim of rehabilitation. This provides: temporary protection from creditor actions an opportunity to restructure the business a pathway to avoid liquidation Scheme of Arrangement A restructuring …

Introduction Insolvency is a situation many businesses may face during periods of financial difficulty. In Malaysia, the legal framework provides both restructuring options for viable companies and formal insolvency processes where recovery is no longer possible. For directors and stakeholders, understanding how insolvency works is essential in order to make informed and responsible decisions. What is Insolvency? A company is generally considered insolvent when it is unable to pay its debts as they fall due or when its liabilities exceed its assets. In practice, insolvency often arises from: cash flow …