The Re Tea Corporation Principle and Junior Creditors' Rights to Participate in a Scheme of Arrangement: A View from Singapore

Author

Chi-Ling SEAH, Singapore Management UniversityFollow

Publication Type

Journal Article

Publication Date

4-2011

Abstract

This paper examines the application of the principle derived from the Re Tea Corporation’s case in recent schemes of arrangement to break negotiation deadlocks between senior and junior creditors of a financially distressed company. This paper argues against an overly technical application of the principle in the Re Tea Corporation’s case which might work injustice against junior creditors by effectively shutting them out of a restructuring. This paper further explores how the holdout problem, which led to the formulation of the Re Tea Corporation principle in the first place, could be addressed while balancing the competing interests of junior claimants in a scheme of arrangement.

Keywords

Insolvency, Schemes of Arrangement

Discipline

Bankruptcy Law

Publication

International Insolvency Review

Volume

20

Issue

2

First Page

161

Last Page

183

ISSN

1099-1107

Identifier

10.1002/iir.194

Publisher

Wiley

Citation

SEAH, Chi-Ling. The Re Tea Corporation Principle and Junior Creditors' Rights to Participate in a Scheme of Arrangement: A View from Singapore. (2011). International Insolvency Review. 20, (2), 161-183.
Available at: https://ink.library.smu.edu.sg/sol_research/990

Comments

Published online (pending inclusion into next issue of journal). Will update journal citation once published in hardcopy.

Additional URL

http://dx.doi.org/10.1002/iir.194