Re Picotin Pte Ltd: Moratoria for Related Companies under Insolvency, Restructuring and Dissolution Act

The Singapore High Court heard applications by Picotin Pte Ltd, a holding company, for moratoria under s 64 of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA), and for moratoria protecting its subsidiaries under s 65 of the IRDA. The applications were resisted by landlords of the subsidiaries, who sought carve-outs for re-entry into their properties. The court granted the moratoria, subject to conditions protecting the landlords' interests, finding the related companies necessary and integral to the proposed restructuring.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Moratoria in respect of the companies extended for three months, subject to conditions allowing landlords to exercise re-entry if rent is unpaid for more than one month.

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court addresses moratoria for related companies under s 65 of the IRDA, balancing restructuring needs with landlords' rights in insolvency.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Picotin Pte LtdApplicantCorporationMoratorium extendedPartial
Picotin ASQ Pte LtdApplicantCorporationMoratorium extendedPartial
Picotin Bay Pte LtdApplicantCorporationMoratorium extendedPartial
Picotin Brewhaus Pte LtdApplicantCorporationMoratorium extendedPartial
The Hogs Bars Pte LtdApplicantCorporationMoratorium extendedPartial
HSBC Institutional Trust Services (Singapore) Limited as Trustee of Capitaland Commercial TrustRespondentTrustConditional Re-entry AllowedPartial
UE One North Development Pte LtdRespondentCorporationConditional Re-entry AllowedPartial

3. Judges

Judge NameTitleDelivered Judgment
Aedit AbdullahJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Lim Hui Li DebbyDentons Rodyk & Davidson LLP
Pang Haoyu SamuelDentons Rodyk & Davidson LLP
Chia Tze Yung JustinHarry Elias Partnership LLP
Kok Yee KeongHarry Elias Partnership LLP
Ho JiaxinHarry Elias Partnership LLP
Toh Ming WaiHarry Elias Partnership LLP

4. Facts

  1. The applicant is a holding company of a group of companies involved in the restaurant and pub business.
  2. The related companies are primarily one-outlet companies under the holding company.
  3. The group of companies encountered difficulties due to the pandemic, delayed expansion, and underperformance.
  4. The applicant sought investment and proposed a compromise with restructuring through a deed poll scheme.
  5. Two landlords sought to exclude their premises from any moratoria under s 65 of the IRDA.
  6. The applicant plans to become the primary co-obligor for all claims against all the companies.
  7. The applicant intends to promote their franchise model and use the related companies' premises as outlets.

5. Formal Citations

  1. Re Picotin Pte Ltd and other matters, , [2024] SGHC 156
  2. Picotin Pte Ltd, 372 of 2024, Originating Application No 372 of 2024
  3. Picotin ASQ Pte Ltd, 373 of 2024, Originating Application No 373 of 2024
  4. Picotin Bay Pte Ltd, 374 of 2024, Originating Application No 374 of 2024
  5. Picotin Brewhaus Pte Ltd, 375 of 2024, Originating Application No 375 of 2024
  6. The Hogs Bars Pte Ltd, 376 of 2024, Originating Application No 376 of 2024
  7. HC/SUM, 1107/2024, HC/SUM 1107/2024
  8. HC/OA, 373/2024, HC/OA 373/2024
  9. HC/OA, 375/2024, HC/OA 375/2024

6. Timeline

DateEvent
Hearing date
Hearing date
Judgment reserved

7. Legal Issues

  1. Moratoria over related companies
    • Outcome: The court found that the related companies played a necessary and integral role in the arrangement and that the arrangement would be frustrated if actions against them were not restrained.
    • Category: Substantive
    • Sub-Issues:
      • Necessity and integrality of related companies to the arrangement
      • Frustration of arrangement if actions against related companies are not restrained
  2. Carve-outs for landlords
    • Outcome: The court declined to grant carve-outs at this time but imposed conditions to protect the landlords' interests, allowing re-entry if rent is unpaid for more than one month.
    • Category: Substantive
    • Sub-Issues:
      • Balancing the interests of the company and the landlord
      • Proprietary interests of the landlord
      • Potential losses to the landlord

8. Remedies Sought

  1. Moratorium under s 64 of the IRDA
  2. Moratoria protecting subsidiaries under s 65 of the IRDA

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Insolvency
  • Restructuring
  • Commercial Litigation

11. Industries

  • Restaurant
  • Hospitality

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Re IM Skaugen SE and other mattersHigh CourtYes[2019] 3 SLR 979SingaporeCited regarding the level of detail required for restructuring plans at the moratorium stage.
In re Atlantic Computer Systems plcChancery DivisionYes[1992] Ch 505England and WalesCited for guidance on weighing competing interests in restructuring, specifically regarding landlords' proprietary interests.
Hyflux Ltd v SM Investments Pte LtdHigh CourtYes[2020] 4 SLR 1265SingaporeThe judge refers to a previous case where he considered In re Atlantic Computer Systems plc.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Insolvency, Restructuring and Dissolution Act 2018Singapore
s 64 of the Insolvency, Restructuring and Dissolution Act 2018Singapore
s 65 of the Insolvency, Restructuring and Dissolution Act 2018Singapore
s 65(1) of the Insolvency, Restructuring and Dissolution Act 2018Singapore
s 65(2) of the Insolvency, Restructuring and Dissolution Act 2018Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Moratorium
  • Related company
  • Restructuring
  • Deed poll scheme
  • Carve-out
  • Re-entry
  • Franchise model
  • Insolvency, Restructuring and Dissolution Act

15.2 Keywords

  • Insolvency
  • Restructuring
  • Moratorium
  • Related Companies
  • Landlords
  • Singapore
  • IRDA

17. Areas of Law

Area NameRelevance Score
Insolvency Law95
Restructuring and Dissolution90
Moratorium85
Schemes of Arrangement75
Contractual terms40
Property Law30
Estoppel20

16. Subjects

  • Insolvency Law
  • Restructuring
  • Schemes of Arrangement