Yap Sze Kam v Yang Kee Logistics: Judicial Management vs. Bondholder Rights
In the General Division of the High Court of Singapore, Yap Sze Kam and Koh Kien Chon applied for judicial management orders for Yang Kee Logistics Pte Ltd (YK HoldCo) and Yang Kee Logistics (Singapore) Pte Ltd (YK LogCo), respectively. The applications were opposed by both companies. Philip Jeyaretnam J dismissed both applications, finding no real prospect that judicial management would achieve the statutory purposes or be in the best interests of the creditors as a whole. The court also held that public interest did not require the making of judicial management orders.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Both applications for judicial management orders are dismissed.
1.3 Case Type
Insolvency
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court considers judicial management applications for Yang Kee Logistics, balancing creditor interests and bondholder rights amid insolvency.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Yap Sze Kam | Applicant | Individual | Application Dismissed | Dismissed | Nair Suresh Sukumaran, Tan Tse Hsien, Bryan, Chen Shixian |
| Yang Kee Logistics Pte Ltd | Respondent | Corporation | Application Dismissed | Won | Mohamed Nawaz Kamil, Alston Yeong, Huang Xinli, Daniel |
| Koh Kien Chon | Applicant | Individual | Application Dismissed | Dismissed | Sim Chong, Chen Sixue |
| Yang Kee Logistics (Singapore) Pte Ltd | Respondent | Corporation | Application Dismissed | Won | Mohamed Nawaz Kamil, Alston Yeong, Huang Xinli, Daniel |
| United Orient Capital Pte Ltd | Other | Corporation | Application Dismissed | Won | Jensen Chow |
| Rising Horizon SPC | Other | Corporation | Application Dismissed | Won | Felicia Soong Wanyi |
| Malayan Banking Berhad, Singapore Branch | Other | Corporation | Application Dismissed | Won | Lam Zhen Yu |
| Maybank Singapore Limited | Other | Corporation | Application Dismissed | Won | Lam Zhen Yu |
| United Overseas Bank Ltd | Other | Corporation | Application Dismissed | Won | Mohan Gopalan |
| Phillip Enterprise Fund Limited | Other | Corporation | Application Dismissed | Lost | Poon Guokun Nicholas |
| Phillip Ventures Enterprise Fund 5 Ltd | Other | Corporation | Application Dismissed | Lost | Poon Guokun Nicholas |
| Watiga Trust Ltd | Other | Trust | Application Dismissed | Won | Siew Guo Wei, Shao Guowei |
| Patrick Bance | Other | Individual | Application Dismissed | Won | Mohamed Nawaz Kamil, Alston Yeong, Huang Xinli, Daniel |
| Cosimo Borrelli | Other | Individual | Application Dismissed | Won | Mohamed Nawaz Kamil, Alston Yeong, Huang Xinli, Daniel |
| Bhavna Pte Ltd | Other | Corporation | Application Dismissed | Won | Mahmood Gaznavi s/o Bashir Muhammad |
| DBS Bank | Other | Corporation | Application Dismissed | Neutral | Stephanie Yeo Xiu Wen, Chng QiYun, Clarice |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Philip Jeyaretnam | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Nair Suresh Sukumaran | PK Wong & Nair LLC |
| Tan Tse Hsien, Bryan | PK Wong & Nair LLC |
| Chen Shixian | PK Wong & Nair LLC |
| Sim Chong | Sim Chong LLC |
| Chen Sixue | Sim Chong LLC |
| Mohamed Nawaz Kamil | Providence Law Asia LLC |
| Alston Yeong | Providence Law Asia LLC |
| Huang Xinli, Daniel | Providence Law Asia LLC |
| Jensen Chow | Rajah & Tann Singapore LLP |
| Felicia Soong Wanyi | WongPartnership LLP |
| Lam Zhen Yu | Withers KhattarWong LLP |
| Mohan Gopalan | Drew & Napier LLC |
| Poon Guokun Nicholas | Breakpoint LLC |
| Siew Guo Wei | Tan Kok Quan Partnership |
| Shao Guowei | Tan Kok Quan Partnership |
| Mahmood Gaznavi s/o Bashir Muhammad | Mahmood Gaznavi Chambers LLC |
| Stephanie Yeo Xiu Wen | WongPartnership LLP |
| Chng QiYun, Clarice | WongPartnership LLP |
4. Facts
- Mr. Yap applied for judicial management as a creditor, having lent $6m to YK HoldCo, which was not repaid.
- Mr. Koh applied for judicial management of YK LogCo as a guarantor of a debt to Phillip Capital, having paid $30,000.
- YK HoldCo issued fixed rate convertible bonds secured by a charge over shares in YK HoldCo and YK PropCo.
- Watiga Trust Pte Ltd exercised its power to appoint receivers and managers over the charged shares.
- The Receivers commenced a sales process and received binding offers from LOGOS and GDPS.
- The Receivers decided to move forward with LOGOS, granting them exclusivity until 28 February 2023.
- The LOGOS deal involves cash for the YK PropCo Charged Shares, refinancing of secured loans, and waiver of rental arrears.
5. Formal Citations
- Yap Sze Kam v Yang Kee Logistics Pte Ltd and another matter, , [2023] SGHC 43
6. Timeline
| Date | Event |
|---|---|
| YK HoldCo issued fixed rate convertible bonds. | |
| Share Charge Agreement was dated. | |
| Share Charge Agreement was dated. | |
| YK HoldCo defaulted on its interest payment obligations. | |
| YK HoldCo defaulted upon maturity of the bonds. | |
| Watiga Trust Pte Ltd exercised its power to appoint receivers and managers. | |
| Receivers commenced their own sales process. | |
| Withdrawal Agreement was dated. | |
| Receivers elicited two binding offers. | |
| Mr Yap applied for the appointment of judicial managers over YK HoldCo. | |
| Mr Koh applied for the appointment of judicial managers over YK LogCo. | |
| Hearing for the appointment of interim judicial managers over YK LogCo. | |
| Arguments for both JM Applications were heard. | |
| Arguments for both JM Applications were heard. | |
| Judgment reserved. |
7. Legal Issues
- Whether the making of judicial management orders is likely to achieve one or more of the purposes of judicial management
- Outcome: The court found no real prospect that the statutory purposes of judicial management would be achieved.
- Category: Substantive
- Sub-Issues:
- Survival of the companies as going concerns
- More advantageous realisation of assets than on a winding up
- Whether judicial management orders would be in the best interests of the creditors considered as a whole
- Outcome: The court held that judicial management orders would not be in the best interests of the creditors considered as a whole.
- Category: Substantive
- Whether public interest requires the making of judicial management orders
- Outcome: The court held that public interest does not require the making of judicial management orders in this case.
- Category: Substantive
8. Remedies Sought
- Appointment of judicial managers
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Insolvency
- Restructuring
11. Industries
- Logistics
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| No cited cases | |||||
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| ss 89 of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 91 of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 91(6) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 89(1) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 91(1) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 91(10)(a) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Judicial management
- Receivers and managers
- Bondholders
- YK HoldCo Charged Shares
- YK PropCo Charged Shares
- LOGOS deal
- GDPS offer
- Insolvency
- Creditors
- Security trustee
15.2 Keywords
- judicial management
- receivers
- insolvency
- bondholders
- logistics
16. Subjects
- Insolvency
- Judicial Management
- Receivership
- Corporate Law
17. Areas of Law
- Insolvency Law
- Judicial Management
- Companies Law
- Credit and Security Law
- Remedies
- Receivership