Liquidation and Receivership
Corporate Rescue Mechanism
Forensic Investigation
Value Creation & Divestments
Others
Liquidation
Liquidation is a formal process where a company’s assets are sold, and the proceeds are used to settle its debts. This service is often employed when a company is insolvent and unable to meet its financial obligations. A licensed liquidator is appointed to oversee the orderly distribution of assets among creditors according to legal priorities. The goal is to maximize returns to creditors and facilitate the winding down of the company in a transparent and legally compliant manner. There are 3 modes of winding up (1) Members’ Voluntary Winding up (for solvent companies) (2) Creditors’ Voluntary Liquidation (insolvent winding up) and (3) Court Winding up (12 various circumstances).
Receivership
Receivership involves the appointment of a receiver and/or manager, typically
by a secured creditor, to take control of a company’s assets. This occurs when a company defaults on its obligations, and the secured creditor/ financial institution/ debenture holder seeks to recover its debt by selling or managing the charged assets. The R&M’s role is to protect the interests of the secured creditor while acting in the best interests of all stakeholders. They may undertake measures to improve the company’s financial position, such as selling assets, restructuring operations, or facilitating a sale of the business as a going concern. Receivership aims to maximize returns to secured creditors while considering the overall financial health of the business.
(appointment under Debenture or court)
The Corporate Rescue Mechanism (CRM) under the Companies Act 2016 provides a framework in Malaysia for financially distressed companies to undergo rehabilitation and continue their operations, thereby avoiding the need for immediate liquidation. The objective is to facilitate the company’s turnaround and preserve its economic value. The 3 available Corporate Rescue Mechanism are Corporate Voluntary Arrangements (“CVA”), Judicial Management (“JM”) and Section 366 Scheme of Arrangements (“SOA”) key features of which include:
Appointment of a Qualified Person (QP):
Moratorium Period:
Development of a Corporate Rescue Plan:
Creditor Involvement:
Implementation of the Corporate Rescue Plan:
Supervision by JM:
Monitoring and Compliance:
Termination of Moratorium:
The Corporate Rescue Mechanism aims to strike a balance between protecting the interests of creditors and providing distressed companies with a viable opportunity to recover. It provides a legal framework for the orderly and transparent rehabilitation of financially distressed companies, contributing to the overall stability of the business environment.
(under Companies Act)
Vide our affiliated firm, we use tailored investigation techniques and methodology to each clients to assist in investigating unusual financial/ corporate activities as part of our fraud investigation service. These activities could be highlighted from internal investigations or whistleblowing channels.
Other forensic related services are:
2. Anti-Fraud/ Bribery Framework: With our extensive fraud and investigation knowledge and experience, we will design and tailor an anti-fraud framework for our clients. We are also able to assess and improve existing anti-fraud framework of clients.
Please visit our affiliate’s website for further details. https://www.virdos-lima.com/areas-of-expertise
(including divestment of assets )
Both value creation and divestment services aim to optimize the financial and operational aspects of a company. While value creation focuses on restructuring and improving the existing business, divestment involves strategically selling certain assets or business units to maximize returns and facilitate the company’s recovery.
Leveraging our expertise within the restructuring and insolvency industry, we provide value creation services to enhance businesses by restructuring/ streamlining their operations, finances, and assets that contribute to overall value improvement.
In divestment services, we conduct estimated business valuation(s), identify potential buyers, negotiate deals, and oversee the due diligence processes. Our goal is to facilitate transparent and compliant divestment transactions, optimizing returns for distressed companies and stakeholders.
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3. Monitoring Accountant: Monitoring accountant services involve continuous review and oversight of financial activities to ensure compliance, accuracy, and transparency. Assess specific internal controls, analyse financial statements, monitor budgets and highlight risks. Contribute to fraud prevention, recommend process improvements, and provide advisory services to enhance financial efficiency and decision-making. The focus is on maintaining data integrity, facilitating accurate financial reporting, and addressing emerging issues promptly. These services are essential for organizations seeking ongoing financial health, regulatory compliance, and informed decision-making.
4. Agreed Upon Procedures: Agreed upon procedure (AUP) assignments involve tailored financial or operational assessments based on specific procedures agreed upon by clients and relevant parties.
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