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 Court

1.2 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 NameRoleTypeOutcomeOutcome TypeCounsels
Cosimo BorrelliOtherIndividualApplication DismissedWon
Malayan Banking Berhad, Singapore BranchOtherCorporationApplication DismissedWon
Maybank Singapore LimitedOtherCorporationApplication DismissedWon
Patrick BanceOtherIndividualApplication DismissedWon
Yang Kee Logistics (Singapore) Pte LtdRespondentCorporationApplication DismissedWon
Yap Sze KamApplicantIndividualApplication DismissedDismissed
Yang Kee Logistics Pte LtdRespondentCorporationApplication DismissedWon
Koh Kien ChonApplicantIndividualApplication DismissedDismissed
United Orient Capital Pte LtdOtherCorporationApplication DismissedWon
Rising Horizon SPCOtherCorporationApplication DismissedWon
United Overseas Bank LtdOtherCorporationApplication DismissedWon
Phillip Enterprise Fund LimitedOtherCorporationApplication DismissedLost
Phillip Ventures Enterprise Fund 5 LtdOtherCorporationApplication DismissedLost
Watiga Trust LtdOtherTrustApplication DismissedWon
Bhavna Pte LtdOtherCorporationApplication DismissedWon
DBS BankOtherCorporationApplication DismissedNeutral

3. Judges

Judge NameTitleDelivered Judgment
Philip JeyaretnamJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Alston YeongProvidence Law Asia LLC
Huang Xinli DanielProvidence Law Asia LLC
Mohamed Nawaz KamilProvidence Law Asia LLC
Lam Zhen YuWithers KhattarWong LLP
Nair Suresh SukumaranPK Wong & Nair LLC
Tan Tse Hsien BryanPK Wong & Nair LLC
Chen ShixianPK Wong & Nair LLC
Sim ChongSim Chong LLC
Chen SixueSim Chong LLC
Jensen ChowRajah & Tann Singapore LLP
Felicia Soong WanyiWongPartnership LLP
Mohan GopalanDrew & Napier LLC
Poon Guokun NicholasBreakpoint LLC
Siew Guo WeiTan Kok Quan Partnership
Shao GuoweiTan Kok Quan Partnership
Mahmood Gaznavi s/o Bashir MuhammadMahmood Gaznavi Chambers LLC
Stephanie Yeo Xiu WenWongPartnership LLP
Chng QiYun, ClariceWongPartnership LLP

4. Facts

  1. Mr. Yap applied for judicial management as a creditor, having lent $6m to YK HoldCo, which was not repaid.
  2. Mr. Koh applied for judicial management of YK LogCo as a guarantor of a debt to Phillip Capital, having paid $30,000.
  3. YK HoldCo issued fixed rate convertible bonds secured by a charge over shares in YK HoldCo and YK PropCo.
  4. Watiga Trust Pte Ltd exercised its power to appoint receivers and managers over the charged shares.
  5. The Receivers commenced a sales process and received binding offers from LOGOS and GDPS.
  6. The Receivers decided to move forward with LOGOS, granting them exclusivity until 28 February 2023.
  7. The LOGOS deal involves cash for the YK PropCo Charged Shares, refinancing of secured loans, and waiver of rental arrears.

5. Formal Citations

  1. Yap Sze Kam v Yang Kee Logistics Pte Ltd and another matter, , [2023] SGHC 43

6. Timeline

DateEvent
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

  1. 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
  2. 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
  3. 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

  1. Appointment of judicial managers

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Insolvency
  • Restructuring

11. Industries

  • Logistics

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
No cited cases

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Insolvency, Restructuring and Dissolution Act 2018Singapore
ss 89 of the Insolvency, Restructuring and Dissolution Act 2018Singapore
s 91 of the Insolvency, Restructuring and Dissolution Act 2018Singapore
s 91(6) of the Insolvency, Restructuring and Dissolution Act 2018Singapore
s 89(1) of the Insolvency, Restructuring and Dissolution Act 2018Singapore
s 91(1) of the Insolvency, Restructuring and Dissolution Act 2018Singapore
s 91(10)(a) of the Insolvency, Restructuring and Dissolution Act 2018Singapore

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

17. Areas of Law

Area NameRelevance Score
Judicial Management90
Insolvency Law75
Credit and Security65
Receivership60
Company Law40
Banking and Finance30

16. Subjects

  • Insolvency
  • Judicial Management
  • Receivership
  • Corporate Law