Logistics Construction Pte Ltd Scheme of Arrangement: Moratorium Application

Logistics Construction Pte Ltd applied to the General Division of the High Court of Singapore on 14 August 2023 for a six-month moratorium under s 64(1) of the Insolvency, Restructuring and Dissolution Act 2018 to restrain legal proceedings while it negotiated with creditors and investors. Goh Yihan JC granted the application but limited the moratorium to three months, finding that the company had demonstrated a genuine attempt to restructure its liabilities and had the support of its largest creditor, OCBC, but that the proposed scheme lacked specific details. The court balanced the interests of the applicant and its creditors in reaching its decision.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application allowed in part

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court granted Logistics Construction Pte Ltd a three-month moratorium to restrain proceedings while it negotiates with creditors and investors.

1.7 Decision Date

17 August 2023

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
DBS Bank Ltd	Respondent	Corporation	Objection noted	Neutral	Foong Han Peow of Rajah & Tann Singapore LLP
Logistics Construction Pte Ltd	Applicant	Corporation	Moratorium Granted in Part	Partial	Lee Lieyong Sean of Aquinas Law Alliance LLP Chua Peili Jacelyn of Aquinas Law Alliance LLP
Oversea-Chinese Banking Corporation Limited	Respondent	Corporation	Support for Moratorium	Neutral	Lye Yu Min of Rajah & Tann Singapore LLP
Buildforms Construction (Pte) Ltd	Respondent	Corporation	Objection noted	Neutral	Muhammad Imran Bin Abdul Rahim of Eldan Law LLP Christabelle Arya Gerard of Eldan Law LLP
Maginet Plumbing Contractor Pte Ltd	Respondent	Corporation	Objection noted	Neutral	Kong Hui Xin Annette of Salem Ibrahim LLC
Golden Landscape & Construction Pte Ltd	Respondent	Corporation	Objection noted	Neutral	Tan Jia Jun James of Covenant Chambers LLC
MKV Engineering and Trading Services Pte Ltd	Respondent	Corporation	Objection noted	Neutral	Lailatulqadriah binte Jaffar of Harry Elias Partnership LLP
Archilite Engineering Pte Ltd	Respondent	Corporation	Objection noted	Neutral	Chan Kok Yeow of Independent Practitioner
Kandenko Co Ltd	Respondent	Corporation	Objection noted	Neutral	Chong Kuan Keong of Chong Chia & Lim LLC Tay Yan Xia of Chong Chia & Lim LLC Loh Pei Wen Bernadette Rena of Chong Chia & Lim LLC
Hongkong and Shanghai Banking Corporation Ltd	Respondent	Corporation	Objection noted	Neutral	Oh Shi Jie Jonathan of Dentons Rodyk & Davidson LLP
HYY Engineering (Pte) Ltd	Respondent	Corporation	Objection noted	Neutral	Tan Han Ru, Amelia of WHM Law Corporation Lee Kok Weng Mark of WHM Law Corporation
Vertical Green Pte Ltd	Respondent	Corporation	Objection noted	Neutral	Darren Neo Eng Jye of Independent Practitioner
SG Façade Engineering Pte Ltd	Respondent	Corporation	Objection noted	Neutral	Wang Yulong of Independent Practitioner
Wireka Sdn Bhd	Respondent	Corporation	Objection noted	Neutral	Jeffrey Lee Soon Quan of Independent Practitioner

3. Judges

Judge Name	Title	Delivered Judgment
Goh Yihan	Judicial Commissioner	Yes

4. Counsels

Counsel Name	Organization
Foong Han Peow	Rajah & Tann Singapore LLP
Lee Lieyong Sean	Aquinas Law Alliance LLP
Chua Peili Jacelyn	Aquinas Law Alliance LLP
Lye Yu Min	Rajah & Tann Singapore LLP
Muhammad Imran Bin Abdul Rahim	Eldan Law LLP
Christabelle Arya Gerard	Eldan Law LLP
Kong Hui Xin Annette	Salem Ibrahim LLC
Tan Jia Jun James	Covenant Chambers LLC
Lailatulqadriah binte Jaffar	Harry Elias Partnership LLP
Chan Kok Yeow	Independent Practitioner
Chong Kuan Keong	Chong Chia & Lim LLC
Tay Yan Xia	Chong Chia & Lim LLC
Loh Pei Wen Bernadette Rena	Chong Chia & Lim LLC
Oh Shi Jie Jonathan	Dentons Rodyk & Davidson LLP
Tan Han Ru, Amelia	WHM Law Corporation
Lee Kok Weng Mark	WHM Law Corporation
Darren Neo Eng Jye	Independent Practitioner
Wang Yulong	Independent Practitioner
Jeffrey Lee Soon Quan	Independent Practitioner

4. Facts

Logistics Construction Pte Ltd applied for a moratorium under s 64(1) of the IRDA.
The applicant sought a six-month moratorium to negotiate with creditors and investors.
The applicant is a wholly-owned subsidiary of Boldtek Holdings Limited.
Boldtek Holdings Limited faced a trading halt and voluntary suspension due to a qualified opinion from its auditor.
The applicant faced demands for payment and legal proceedings.
The applicant was in discussions with investors for a potential $6m investment.
OCBC, the largest creditor, supported a six-month moratorium.

5. Formal Citations

Re Logistics Construction Pte Ltd, Originating Application No 726 of 2023, [2023] SGHC 231

6. Timeline

Date	Event
1992-04-25	Logistics Construction Pte Ltd incorporated in Singapore
2013-01-12	Boldtek Holdings Limited listed on the Catalist of the Singapore Exchange
2022-06-01	Group awarded construction contracts worth approximately $119.1m
2022-10-25	Group's order book stood at about $79.4m
2023-01-01	Group awarded construction contracts worth approximately $119.1m
2023-01-01	Boldtek Holdings Limited called for a trading halt
2023-01-01	Boldtek Holdings Limited converted trading halt into a voluntary suspension
2023-07-31	2nd Affidavit of Phua Lam Soon dated
2023-08-04	1st Affidavit of Ong Cheng Chuen dated
2023-08-04	1st Affidavit of Lim Chuen Yang dated
2023-08-08	3rd Affidavit of Phua Lam Soon dated
2023-08-14	Hearing before Goh Yihan JC
2023-08-14	Application allowed for a three-month moratorium
2023-08-18	Judgment Date

7. Legal Issues

Grant of Moratorium
- Outcome: The court granted a three-month moratorium, finding a reasonable prospect of the scheme working but requiring more specific details.
- Category: Substantive
- Sub-Issues:
  - Reasonable prospect of proposed compromise or arrangement working
  - Acceptability of proposed compromise or arrangement to the general run of creditors
  - Good faith of the applicant

8. Remedies Sought

Moratorium on legal proceedings

9. Cause of Actions

Application for Moratorium

10. Practice Areas

Insolvency
Restructuring
Corporate Law
Commercial Litigation

11. Industries

Construction
Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Re All Measure Technology (S) Pte Ltd (RHB Bank Bhd, non-party)	High Court	Yes	[2023] SGHC 148	Singapore	Cited for the principle that cases interpreting s 211B(1) of the Companies Act continue to be applicable in interpreting s 64(1) of the IRDA.
Re Zipmex Co Ltd and other matters	High Court	Yes	[2022] SGHC 196	Singapore	Cited for the principle that cases interpreting s 211B(1) of the Companies Act continue to be applicable in interpreting s 64(1) of the IRDA.
Re IM Skaugen SE and other matters	High Court	Yes	[2019] 3 SLR 979	Singapore	Cited for the principle that a moratorium is an extraordinary relief and the court undertakes a balancing exercise between allowing the applicant breathing space and ensuring that the interests of creditors are sufficiently safeguarded.
Pathfinder Strategic Credit LP and another v Empire Capital Resources Pte Ltd and another appeal	Court of Appeal	Yes	[2019] 2 SLR 77	Singapore	Cited for the principle that a moratorium application must contain sufficient particulars.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Insolvency, Restructuring and Dissolution Act 2018	Singapore
s 64(1) of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
Building and Construction Industry Security of Payment Act 2004	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Moratorium
Scheme of arrangement
Insolvency, Restructuring and Dissolution Act 2018
Creditors
Restructuring
Trading halt
Voluntary suspension
Qualified opinion
Scheme managers

15.2 Keywords

moratorium
scheme of arrangement
insolvency
restructuring
Logistics Construction Pte Ltd

17. Areas of Law

Area Name	Relevance Score
Insolvency Law	95
Restructuring and Dissolution	95
Moratorium	90
Schemes of Arrangement	80
Company Law	60
Contract Law	30
Construction	20
Arbitration	15

16. Subjects

Insolvency
Corporate Restructuring
Schemes of Arrangement
Moratoriums