allows for out-of-court liability management exercises followed by court approval of a scheme of arrangement. He cited a noteworthy case before Judge Peck in which bond restructuring was successfully conducted in the Singapore International Court.
In contrast, mainland China lacks a clear legal basis for prepacks and generally discourages Chapter 11-style proceedings. In Hong Kong, courts remain skeptical of schemes negotiated outside the courtroom, often criticizing debtors for lacking transparency. He mentioned two specific cases where courts refused to confirm schemes despite majority approval— one due to heterogeneity among creditor groups and the other due to insufficient disclosure to dissenting creditors. Middleton concluded that while prepacks could theoretically be useful for pre-negotiated asset sales, the current legal and commercial environment in Hong Kong makes consensual outcomes extremely difficult.
Hon
. James M. Peck – Commentary on Novaland Case
Judge Peck provided insights into a landmark case involving Novaland, marking the first instance of a Vietnamese company using the Singapore court system to confirm a prepackaged restructuring. Novaland negotiated the terms with its creditors and obtained judicial approval within 15 days. The legitimacy of using Singapore courts was based on a dispute resolution clause within the bonds, providing sufficient jurisdictional connection. Judge Peck noted that this case demonstrated how prepacks can improve efficiency by eliminating the need for creditor meetings, though he also observed that the solution was only a temporary fix for the company. He added that legal professionals must obtain a special registration to appear before Singapore courts.
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