SINGAPORE - The Ministry of Law (MinLaw) is committed to promoting a regime that seeks to maintain a balance between competing interests, without favouring either debtors or creditors.
A spokesman, responding to queries from The Straits Times last week, said Singapore has a modern and progressive regime that incorporates the best features of the world's leading jurisdictions, allying new powerful tools with the inherent flexibility of the previous regime.
"It is designed to facilitate successful restructuring, where possible, by providing a platform for parties to negotiate in good faith, while protecting creditors' rights," she said.
"The Ministry of Law continues to monitor the impact that these reforms have on corporate restructurings," she added.
MinLaw noted that the unprecedented impact of the Covid-19 pandemic has led the Government to introduce a range of measures to allow employees, businesses and the economy to tide through this exceptional period.
These include temporary wage subsidies to protect jobs, a rental relief framework and a legal framework for temporary relief from legal action due to the inability to perform certain contracts arising from the pandemic, among many other initiatives.
"The Ministry of Law will be introducing a Re-Align Framework to help businesses that have been significantly impacted by Covid-19 to renegotiate selected types of contracts with their counter-parties to realign with current economic conditions and business objectives," said the spokesman.
Explaining the framework in Parliament last week, Second Minister for Law Edwin Tong said the relief measures in the Covid-19 (Temporary Measures) Act passed in April cannot be continued indefinitely.
"We will risk sustaining businesses that are no longer viable. It would trap and lock away precious economic capacities such as workers, or property and assets, and this, in the longer term, would be damaging for our economy," he said.
Further moves for a temporary simplified insolvency programme to help micro and small companies have been proposed.
Passed by Parliament last week, the programme will provide such companies, where appropriate, an opportunity to restructure their debts and put themselves on a sustainable financial footing.
The ministry said: "Where the business is no longer viable, the programme will provide a simplified winding-up process. This programme aims to maximise returns to creditors and prevent individuals behind the companies from being financially damaged in the long run."