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Covid drives workload for restructuring, insolvency lawyers

Covid drives workload for restructuring, insolvency lawyers

Source: Business Times
Article Date: 05 Nov 2021
Author: Tay Peck Gek

Lawyers specialising in restructuring and insolvency work have been kept busy as the pandemic continues to put a strain on companies in the current economic climate.

Laywers specialising in restructuring and insolvency work have been kept busy as the pandemic continues to put a strain on companies in the current economic climate.

Although these activities of rehabilitating corporations or helping them close the last chapter have not quite reached the levels seen in the Global Financial Crisis (GFC) in 2009, there is nonetheless growing demand for such specialists, said law firms.

Shaun Langhorne, a partner of the restructuring and insolvency practice at Clifford Chance, told The Business Times that the firm is seeing more foreign companies consider Singapore as a forum to implement cross border restructuring.

He recently represented Norwegian vessel operator Prosafe and its Singaporean subsidiary Prosafe Rigs to obtain sanctioned schemes from the Singapore High Court at a hearing on Oct 18, for the Prosafe financial restructuring of US$1.5 billion.

"Prosafe was a Norwegian-based company, but Asian-based companies - Indonesian companies in particular - are coming to Singapore in increasing numbers," said Langhorne.

"Where companies operate businesses across jurisdictional borders, having the ability to secure a moratorium in Singapore to give time and stability to negotiate a restructuring is incredibly attractive."

The tools available here, following amendments to Singapore's restructuring and insolvency laws in 2017, have given the Republic a tremendous advantage, he added.

WongPartnership's managing partner Ng Wai King said there has been a fair amount of activity in the restructuring and insolvency space, given Singapore's growing prominence as a hub coupled with economic uncertainty during the past 2 years. "Our R&I lawyers are definitely seeing more work."

Loh Kia Meng, Dentons Rodyk & Davidson senior partner and chief operating officer, has observed that the uptick in restructuring, insolvency and bankruptcy work is less than that during the GFC, in which century-old Lehman Brothers and other notable institutions went under.

"That said, we anticipate the growing trend to continue, especially if the Covid-19 pandemic does not abate soon," Loh added. His firm has recruited a partner to strengthen its expertise in this field: Debby Lim, who joined in October.

Ashok Kumar, managing director of BlackOak, said that his specialist boutique in restructuring and insolvency practice has been quite busy the last two years. It is also beefing up its practice. "We are looking to hire another five across all seniority ranges in the year ahead," he said.

However, the demand for these specialists is not easy to meet, given that this involves a niche skill set.

Veteran headhunter Zhou Qianlin, who specialises in in-house legal, compliance and contract solutions practice in Asia, told BT that there are not many insolvency lawyers around, so law firms may use their banking or litigation lawyers to plug the gap.

"Lawyers may be keen to move into this field but again, law firms may not have the capacity to train from scratch," Zhou added.

Ansa Search co-founder Lee Shulin has observed that the pandemic has raised the demand for restructuring and insolvency lawyers.

"Covid-19 has made it even more pronounced. Challenging market conditions have required companies to relook traditional business models, financing arrangements and cash deployment. This is happening across sectors and industries, and to name a few - in hospitality, shipping and construction," she said.

Lee, formerly a lawyer with one of the leading firms in Singapore, added that restructuring and insolvency work is typically handled by finance lawyers who do debt restructuring or litigators who have a niche expertise in this area.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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