Ascentra Holdings v SPGK Pte Ltd: Cross-Border Insolvency & Recognition of Foreign Solvent Liquidation Proceedings
The Singapore Court of Appeal heard an appeal by Ascentra Holdings, Inc (in official liquidation), Chua Suk Lin Ivy, and Graham Robinson against SPGK Pte Ltd regarding the recognition of Ascentra's Cayman Islands liquidation as a foreign main proceeding under the Insolvency, Restructuring and Dissolution Act 2018. The court, led by Sundaresh Menon CJ, Steven Chong JCA, and Belinda Ang Saw Ean JCA, allowed the appeal, holding that the SG Model Law encompasses foreign insolvency proceedings concerning solvent companies. The court found that Ascentra's Cayman Liquidation qualifies as a foreign proceeding under the SG Model Law.
1. Case Overview
1.1 Court
Court of Appeal of the republic of singapore1.2 Outcome
Appeal Allowed
1.3 Case Type
Insolvency
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal held that the SG Model Law encompasses foreign insolvency proceedings concerning solvent companies, allowing recognition.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Ascentra Holdings, Inc (in official liquidation) | Appellant | Corporation | Appeal Allowed | Won | |
| Chua Suk Lin Ivy | Appellant | Individual | Appeal Allowed | Won | |
| Graham Robinson | Appellant | Individual | Appeal Allowed | Won | |
| SPGK Pte Ltd | Respondent | Corporation | Appeal Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | Yes |
| Steven Chong | Justice of the Court of Appeal | No |
| Belinda Ang Saw Ean | Justice of the Court of Appeal | No |
4. Counsels
4. Facts
- Ascentra Holdings, Inc. was in the business of selling health and beauty products and computer communications software.
- Ascentra's shareholders resolved to place it in voluntary liquidation on 1 June 2021.
- Ascentra filed documents to initiate voluntary liquidation with the Cayman Islands Registrar on 2 June 2021.
- Ascentra’s directors failed to file a declaration of solvency.
- The Cayman Grand Court ordered the liquidation to continue under supervision on 17 September 2021.
- The Liquidators filed a certificate in the Cayman Grand Court as to Ascentra’s solvency on 23 September 2021.
- The appellants maintain that Ascentra has potential claims against the respondent, SPGK Cayman as well as another company incorporated in Singapore, Scuderia Bianco Pte Ltd.
5. Formal Citations
- Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte Ltd, Civil Appeal No 23 of 2022, [2023] SGCA 32
6. Timeline
| Date | Event |
|---|---|
| Shareholder disputes arose over Ascentra’s business direction. | |
| Ascentra’s shareholders resolved to place it in voluntary liquidation. | |
| Ascentra filed documents to initiate voluntary liquidation with Cayman Islands Registrar. | |
| Mr. Robinson petitioned the Cayman Grand Court for liquidation to proceed under court supervision. | |
| Cayman Grand Court allowed Mr. Robinson’s petition and ordered the liquidation to continue under supervision. | |
| Liquidators filed a certificate in the Cayman Grand Court as to Ascentra’s solvency. | |
| Mr. Robinson stated that the Liquidators had determined that Ascentra was solvent. | |
| Appellants filed OS 16 seeking recognition of Ascentra’s Cayman Liquidation in Singapore. | |
| Judgment reserved. |
7. Legal Issues
- Recognition of Foreign Proceeding
- Outcome: The Court of Appeal held that Ascentra's Cayman Liquidation qualifies as a foreign proceeding within the meaning of Art 2(h) of the SG Model Law.
- Category: Substantive
- Interpretation of 'Law Relating to Insolvency'
- Outcome: The Court of Appeal interpreted Art 2(h) of the SG Model Law broadly to include foreign proceedings concerning companies that are neither insolvent nor in severe financial distress.
- Category: Substantive
8. Remedies Sought
- Recognition of Ascentra’s Cayman Liquidation in Singapore
- Recognition of the Liquidators as foreign representatives of Ascentra
- Granting the Liquidators powers in relation to Ascentra’s property and assets
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Cross-Border Insolvency
- Liquidation
- Restructuring
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Ascentra Holdings, Inc (in official liquidation) and others (SPGK Pte Ltd, non-party) | High Court | Yes | [2023] SGHC 82 | Singapore | Details the background facts of the case, including Ascentra's business and the disputes among its shareholders. |
| Tan Cheng Bock v Attorney-General | Court of Appeal | Yes | [2017] 2 SLR 850 | Singapore | Formulated the approach to statutory interpretation. |
| Sun Electric Power Pte Ltd v RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd) | Court of Appeal | Yes | [2021] 2 SLR 478 | Singapore | Defines insolvency for the purposes of Art 2(h) of the SG Model Law. |
| United Securities Sdn Bhd (in receivership and liquidation) and another v United Overseas Bank Ltd | Court of Appeal | Yes | [2021] 2 SLR 950 | Singapore | Affirmed that the relevant foreign law under Art 2(h) of the SG Model Law must deal with insolvency or severe financial distress. |
| Re Betcorp Limited (in liquidation) | Nevada US Bankruptcy Court | Yes | 400 BR 266 (Nevada US Bankruptcy Court, 2009) | United States | Requirement that a “foreign proceeding” be commenced under a law relating to insolvency or the adjustment of debts does not require the company to be either insolvent or contemplating the adjustment of debt. |
| Re Sturgeon Central Asia Balanced Fund Ltd (in liquidation) (No 2); Carter v Bailey and another (as foreign representatives of Sturgeon Central Asia Balanced Fund Ltd) | High Court of England and Wales | Yes | [2020] EWHC 123 (Ch) | England and Wales | Contrary to the UNCITRAL Model Law’s purpose and object to enlarge its scope by interpreting “foreign proceeding” as including proceedings concerning solvent companies. |
| Hitachi Plant Engineering & Construction Co Ltd and another v Eltraco International Pte Ltd and another appeal | Court of Appeal | Yes | [2003] 4 SLR(R) 384 | Singapore | Recognized that there are a myriad of situations in which schemes of arrangement could be deployed in the corporate restructuring of solvent companies. |
| In re Integrated Telecom Express, Inc | US Court of Appeals for the Third Circuit | Yes | 384 F.3d 108 (3rd Cir, 2004) | United States | Corporate reorganizations in the US may be commenced under Chapter 11 of the US Bankruptcy Code in respect of solvent companies. |
| In re Johns-Manville Corporation | SD New York US Bankruptcy Court | Yes | 36 BR 727 (SD New York US Bankruptcy Court, 1984) | United States | The drafters of the US Bankruptcy Code envisioned that a financially beleaguered debtor with real debt and real creditors should not be required to wait until the economic situation is beyond repair in order to file a reorganisation petition. |
| In re ABC Learning Centres Ltd | Delaware US Bankruptcy Court | Yes | 445 BR 318 (Delaware US Bankruptcy Court, 2010) | United States | Granted recognition in respect of foreign proceedings without considering whether the companies involved in those proceedings were either insolvent or in severe financial distress. |
| In re Manley Toys Limited | New Jersey US Bankruptcy Court | Yes | 580 BR 632 (New Jersey US Bankruptcy Court, 2018) | United States | Granted recognition in respect of foreign proceedings without considering whether the companies involved in those proceedings were either insolvent or in severe financial distress. |
| Re Stanford International Bank Ltd and another | Court of Appeal | Yes | [2010] 3 WLR 941 | United Kingdom | Held that the UNCITRAL Model Law could apply to solvent companies. |
| Re Agrokor DD and in the matter of the Cross-Border Insolvency Regulations 2006 | High Court of England and Wales | Yes | [2017] All ER (D) 83 (Nov) | England and Wales | The requirement that the law under which the proceeding is brought be ‘an insolvency law’ is satisfied if insolvency is one of the grounds on which the proceeding can be commenced. |
| Re Chow Cho Poon (Private) Ltd | Supreme Court of New South Wales | Yes | (2011) 80 NSWLR 507 (SC, NSW) | Australia | The whole of the Singapore Companies Act or, at the least, the whole of its winding up provisions might be classified as ‘a law relating to insolvency’. |
| ANZ National Bank Ltd v Sheahan and Lock | Auckland High Court | Yes | [2013] 1 NZLR 674 | New Zealand | The solvent status of a company does not exclude proceedings concerning that company from the scope of the Insolvency (Cross-Border) Act 2006 (NZ). |
| In re Global Cord Blood Corporation | SD New York US Bankruptcy Court | Yes | 2022 WL 17478530 (SD New York US Bankruptcy Court) | United States | The relevant test is not whether the currently pending proceeding concerns insolvency or adjustment of [debt], or even whether the current proceeding in some sense relates to those objectives, but rather whether the proceeding is being brought under a ‘law’ that ‘relat[es] to’ insolvency or adjustment of debt. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Companies Act (2021 Revision) | Cayman Islands |
| Companies Act 1967 | Singapore |
| Bankruptcy Code 11 USC | United States |
| Australian Corporations Act 2001 | Australia |
15. Key Terms and Keywords
15.1 Key Terms
- Foreign proceeding
- SG Model Law
- UNCITRAL Model Law
- Cross-border insolvency
- Voluntary liquidation
- Cayman Act
- Adjustment of debt
- Solvent liquidation
- Foreign representative
- Collective proceeding
15.2 Keywords
- insolvency
- cross-border
- liquidation
- solvent
- recognition
- foreign proceeding
17. Areas of Law
16. Subjects
- Insolvency
- Cross-Border Insolvency
- Liquidation
- Company Law