MDSA RESOURCES Sdn Bhd

On the court record

Illustrates the intersection of winding-up, abuse-of-process striking out and the creditor-classification and disclosure requirements governing a scheme of arrangement.

MDSA Resources Sdn Bhd appears in the reported judgments as a company litigating over winding-up, striking out and a scheme of arrangement in the High Court (Mahkamah Tinggi) and the Federal Court (Mahkamah Persekutuan). Its matters place it within both the insolvency framework of the Companies Act 2016 and the strata-property context of a mixed development.

In one decision concerning winding-up, the court considered an inability to pay a judgment debt following a statutory notice, the presumption of insolvency arising from non-compliance and whether it was rebutted, under sections 465(1)(e) and 466(1)(a) of the Companies Act 2016. The same decision addressed an application to appoint an interim liquidator heard together with the petition, whether that application had become academic, and the requirement of a sufficient ground and of assets shown to be in jeopardy under section 476(1) and rule 35(1) of the Companies (Winding-Up) Rules 1972, together with the court's discretion in appointing a liquidator and whether it was bound by a creditor's nomination.

A second matter engaged the company as a defendant to a striking-out application under Order 18 rule 19(1)(d) of the Rules of Court 2012, on the footing that the proceedings were an abuse of process because there were already pending civil suits against the company, several such suits being identified. A Federal Court decision engaged the company in a scheme of arrangement under section 366(1) of the Companies Act 2016, raising whether the votes of related-party creditors should be treated differently from those of other creditors in the same class, whether the proper classification of creditors should be determined at the leave stage, and whether there had been inadequate disclosure in the explanatory statement at the sanction stage. Across the decisions, the company illustrates the intersection of winding-up, abuse-of-process striking out and the classification and disclosure requirements that govern a scheme of arrangement.