The corporate rescue mechanism is governed by the Malaysian Companies Act, 2016 and it provides a legal framework for financially distressed companies to restructure and rehabilitate their operations and finances. This will provide a chance for the companies to preserve their business, saving jobs and avoid liquidation. 
 

Under the corporate rescue mechanism, companies may apply for moratorium. During the moratorium period, creditors are refrained from taking any legal action against them. Thus, providing a breathing space for companies and allowing them to focus on restructuring and rehabilitating their operations and financials without having to face the imminent threat of being wound up by their creditors. 
 

The corporate rescue mechanism aims to protect the interests of all stakeholders, including the company, creditors, and shareholders, while providing a structured and transparent process for financially distressed companies to weather the storm.
 

In this newsletter, we will discuss how corporate rescue mechanisms namely, Corporate Voluntary Agreement (CVA), Judicial Management (JM) and Scheme of Arrangement (SOA) is able to assist financially distressed companies to preserve their business, saving jobs and avoid liquidation. 
 

 

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