Law. Faith. Justice. Community. Culture.
It was reported that in the light of the liquidation of long-surviving departmental store Robinsons, goods suppliers have been experiencing issues with payments for sold consigned goods.
What has not been considered in these reports is that suppliers who consigned goods to Robinsons should consider if it is indeed a consignment at law and whether title or property of goods have passed to Robinsons, or if not then whether they can take back the goods.
Continue reading “Retailer Insolvency and Rights of Goods Suppliers”
Significance: Singapore High Court, in determining a case of undue preference and breach of fiduciary duties by a former director of a company, considered the application of the running account principle defence. The principle is that a transaction, which on its face is an undue preference, can be upheld on the basis that it was made under a mutually beneficial running account. The Court held that the fact that an impugned payment was made pursuant to a running account is by itself insufficient to negate an intention to prefer – it must have been made with the intention of obtaining new value to keep the business going. The running account principle, so understood, is not strictly an independent defence, but goes to proving that the insolvent company was acting solely by reference to proper commercial considerations in making the payment and was not influenced at all by a desire to prefer the creditor: [55].
The Court also considered that the court’s broad discretion under s 99(2) of the Bankruptcy Act allows it, in an appropriate case, to order a partial reversal of transactions found to be undue preferences if justice so requires. Such an order may be justified, for example, in clear cases where the parties’ claims are uncontroversial, or where there is an agreement between the preferred creditor and the liquidators as to the amount which ought to be set aside for the claims of the other unsecured parties: [76].
The Court also followed the English Court of Appeal’s decision in Liquidator of West Mercia Safetywear Ltd v Dodd and another (1988) BCC 30 (“West Mercia”) in holding a director personally liable for procuring an undue preference on the basis of breach of fiduciary duties.
I read the Straits Times report “Investors cry foul over tree investments gone wrong” (25 February 2016) with sadness. My heart goes out to the many investors who put in their savings and hard earned money into the scam. In short, investors put in money into a Tropical Forestry Venture(S) Pte Ltd to invest in valuable tree saplings. Turns out to be a scam. The people behind the company disappeared with the cash. But what can be done for these investors to seek justice?
Continue reading “Tropical Forestry Venture Investment Scam: How to Obtain Recompense?”
The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd and another appeal [2012] 4 SLR 1182; [2012] SGCA 53 – disclosure of professional fee arrangements to scheme creditors and the court
Significance: entities who act as Scheme Managers should take note of the duties and principles involved in implementing a Scheme as laid down by the SGCA in both judgments of RBS v TT International; the breach of duties may result in the Scheme being set aside and costs of the Scheme manager being forfeited.