Asia-Pacific Restructuring Review 2025

IN SUMMARY

Singapore's DIP fnancing regime was introduced to much fanfare in 2017 as a step towards positioning Singapore as a global restructuring hub; however, uptake of the regime has been poor. Nevertheless, the handful of cases that have made use of the framework reveal interesting trends in the courts' interpretation of the legislation. Although US case law remains persuasive, and the Singapore regime draws much inspiration from the US equivalent, the Singapore regime should not mirror the US regime given its original purpose and the idiosyncrasies of the Asian market. There remains reason to be optimistic about the future of Singapore's regime, and it is expected to be put to greater use in the coming years.

DISCUSSION POINTS

• DIP fnancing in Singapore
• Application of Singapore's DIP fnancing framework
• Trends in super-priority applications
• Comparison between the Singapore and US DIP fnancing regimes 
• Opportunities and pitfalls for debtors and creditors

REFERENCED IN THIS ARTICLE

• Insolvency, Restructuring and Dissolution Act 2018
• Companies Act 2006
• US Bankruptcy Code
• Re Attilan Group Ltd
• Re Design Studio Group Ltd and other matters

INTRODUCTION

Singapore's debtor-in-possession (DIP) fnancing provisions were frst introduced to much fanfare in 2017 with the passing of the Companies (Amendment) Act 2017. The regime was the frst rescue fnance framework in Asia-Pacifc and came in the early days of Singapore's concerted efforts to position itself as a global restructuring hub; however, despite the uniqueness of the offering and the palpable parliamentary support, Singapore's DIP fnancing offering has yet to make the impact it seemed destined for.

This article takes stock of Singapore's DIP fnancing regime and considers the plausible causes of its seemingly poor uptake. It analyses the points debtors should be mindful of to make a successful application under the regime and provides an argument for why there is still reason to be cautiously optimistic about the regime's success in Asia-Pacifc.

DIP FINANCING IN SINGAPORE

The regime, originally housed in the Singapore Companies Act 2006 (the Companies Act), has since been rolled into section 67 of the updated Insolvency, Restructuring and Dissolution Act 2018 (IRDA) as part of Singapore's effort to consolidate its insolvency-related legislation into a single piece of legislation. At the time of the IRDA's passing, Parliament acknowledged the concept of rescue fnancing as the 'lifeblood of a successful restructuring'.¹

There are many benefts to DIP fnancing that have been succinctly summarised in academic literature as 'preserving value for the beneft of society as a whole'.² DIP fnancing incentivises the debtor's counterparties to maintain their provision of goods and services (be it labour or loans) to viable but fnancially distressed companies, thereby preventing those companies from becoming non-viable businesses and allowing them to continue to pursue value-creating projects.³ Singapore, taking its cue from the United States, recognises not only the importance of DIP fnancing as a tool for restructuring but also a gap in the Asia-Pacifc market and, therefore, an opportunity to elevate Singapore's restructuring and insolvency offering.

Until recently, Singapore was the only jurisdiction across Asia-Pacifc to extend super-priority status to incentivise rescue fnancing, albeit subject to certain conditions.⁴ Other popular forums for restructuring and insolvency matters, including Australia and Hong Kong, permit debtors to raise post-fling debt but do not go so far as to offer debtors the option of priming liens.

The granting of super-priority status to a fnancing arrangement is not a binary decision, and the legislation is structured to give the courts fexibility to decide the level of priority that should be granted to the proposed indebtedness.⁵ These levels (collectively 'super priority') are set out in section 67(1), paragraphs (a) to (d) of the IRDA:

APPLICATION OF SINGAPORE'S DIP FINANCING FRAMEWORK

Since the framework's initial introduction in 2017, there have been a handful of applications for super priority. These cases, while notably scarce, are helpful markers in illuminating the general trend of Singapore's jurisprudence on rescue fnancing and developing the courts' interpretation of the legislation.

Attilan

In July 2017, Attilan applied for super-priority fnancing under section 67(1), paragraphs (a) to (b) of the IRDA (at the time, section 211E(1), paragraphs (a) to (b) of the Companies Act). It cited its loss-making status as grounds for being unable to raise funds through bank borrowings or equity issuances. It then made an offer of super priority to the opposing creditor, Philip Asia, on 3 August 2017.

In its judgment,⁶ the court declined to allow sums disbursed under a subscription agreement to be treated as rescue fnancing and be granted super priority over other preferential and unsecured claims in the event of a winding up. The key takeaways from the judgment are as follows:

• Applicants must demonstrate that reasonable efforts were taken to secure alternative fnancing without the type of super priority sought. Credible evidence showing the same (eg, correspondence relating to negotiations with other possible rescuers) is expected and '[mere] unsubstantiated assertions cut no ice'.⁷ Evidence of these attempts must be from attempts made before the section 67 application, not after the fact.⁸ 
• Preconditions to the fnancing stipulated by the rescue fnancier are not fatal to the application as such preconditions are not prohibited under the relevant legislation.⁹
• The rescue fnancing need not be 'entirely new' but may be additional fnancing from an existing creditor or even premised on a prior obligation. To qualify for super priority in this case, the obligation to inject new funds should not stem from a pre-existing obligation but rather should either be a new stand-alone obligation or be at the option of the creditor (the exercise of which can be made contingent on it obtaining super-priority status for these injected funds).¹⁰ 
• The application should specify from the outset which limb of section 67(1) is being invoked so that opposing creditors may have adequate notice to prepare any arguments accordingly.¹¹ 
• Further conditions the court will also consider relevant in an application under section 67 are¹² whether the proposed fnancing follows sound and reasonable business judgement, alternative fnancing is available on any other basis, the fnancing is in the best interest of the creditors, and better offers, bids or timely proposals are before the court.
• The court will consider US case law where appropriate in 'illuminating the appropriate construction'¹³ of Singapore's DIP fnancing provisions.

While Attilan was unsuccessful in its application for super priority to be ascribed to its proposed fnancing, it remains signifcant in shaping the way Singapore's DIP fnancing legislation is interpreted and applied. Aedit Jestablished several key considerations for the court, which continue to be adhered to in the cases that have followed, including the standard of proof an applicant must meet to make out its case for super priority being 'on a balance of probabilities'.¹⁴ The IRDA and the Companies Act are silent on this point.

Aedit J's ruling also shed light on the efforts an applicant is expected to take and produce evidence of to persuade the court that it was not able to obtain rescue fnancing from any alternative person or under any alternative priority arrangement. The requirement for hard evidence is grounded in policy, owing to the disruptive nature of a successful super-priority application.

As the frst application of its kind in Singapore, the most crucial takeaway from Attilan is the amount of sway US jurisprudence is likely to have over Singapore's interpretation of its own DIP fnancing regime. While it is no secret that Singapore's legislation takes inspiration from the United States, the degree to which the court found US case law to be persuasive in this case provides helpful insight into how the courts may approach the interpretation of section 67(1) of the IRDA in future cases.

Asiatravel

Asiatravel successfully obtained an order for super-priority fnancing under section 67 (1)(b) of the IRDA (at the time, section 211E(1)(b) of the Companies Act).¹⁵ It had approached existing creditors and documented their negotiations and correspondence to use as evidence of their unwillingness to provide any further fnancing. Asiatravel had also engaged a third-party investment banking and fnancial advisory frm, DHC Capital, to identify and approach other potential lenders to provide further fnancing. DHC Capital approached a total of nine other potential lenders, none of which were willing to provide any fnancing for various reasons.

Asiatravel was the frst successful application for super priority in Singapore. Asiatravel's appointment of a fnancial adviser to seek fnancing on its behalf was deemed acceptable evidence of reasonable efforts being taken to secure alternative rescue fnancing without the type of super priority sought in the application.

Swee Hong

Swee Hong had been granted a moratorium order under section 64(1) of the IRDA (at the time, section 211B of the Companies Act).¹⁶ It then successfully obtained an order for super-priority fnancing under section 67(1), paragraphs (b) and (c) of the IRDA.¹⁷

Swee Hong's debt of up to S$3.1 million was granted security by way of a frst-ranking fxed charge over unencumbered assets (plant and machinery), and, in the event of a winding up, priority was to be granted over all preferential debts specifed in section 203(1), paragraphs (a) to (i) of the IRDA up to an amount of S$2.9 million.

This judgment highlights that reasonable efforts to explore alternative types and sources of fnancing that did not entail super priority must be shown. Applicants must also demonstrate that the proposed super-priority fnancing is in the best interests of the creditors. This can be illustrated by the fact that no better offers or proposals were available and can include assessing the overall restructuring (eg, outcomes of the scheme of arrangement) against a comparator (ie, the most likely scenario in the absence of the scheme being approved, which need not necessarily be insolvent liquidation).

Applicants must demonstrate that the proposed super-priority fnancing is caught by the defnition of 'rescue fnancing' and is necessary for continued operations and to preserve its value as a going concern.

Design Studio

Design Studio successfully applied for super priority for its proposed rescue fnancing to be provided by Hongkong and Shanghai Banking Corporation (HSBC) and a major shareholder, DEPA United PJSC (DEPA), under section 67(1)(b) of the IRDA (at the time, section 211E(1)(b) of the Companies Act).¹⁸ The purpose of the proposed fnancing was to allow Design Studio to continue business operations as a going concern by funding working capital and providing bonding facilities for customer projects.

HSBC proposed to provide S$39.3 million in new money (totalling a S$50 million contribution when combined with HSBC's existing fnancing). DEPA proposed to provide S$8.38 million in new money (totalling a S$12 million contribution when combined with DEPA's existing fnancing). The new money fnancing would essentially allow HSBC and DEPA to upgrade the priority status of their existing fnancing following the granting of a super-priority order. It was acknowledged that HSBC was Design Studio's sole secured creditor. As such, no other creditors' rights would be prejudiced or otherwise affected by the proposed fnancings.

Design Studio was the frst case of 'roll-up' fnancing¹⁹ being approved. Roll-up fnancings fall under the defnition of 'rescue fnancing' in the Companies Act insofar as they are necessary for the survival of the debtor as a going concern (eg, by supporting operational working capital needs or preserving asset value in the event of a winding up).²⁰ The court noted that there is no express prohibition of roll-ups and the fact that the new funds are used to pay off pre-existing debt will, therefore, not prevent roll-up fnancings from being included in the defnition of rescue fnancing, which is sufciently broad.²¹

Whether the courts were willing to accept roll-ups as a form of rescue fnancing had been a notable open question in secondary literature following Attilan. Design Studio showcases not only the increasing sophistication of the Asia-Pacifc market and appetite for these highly structured arrangements, but also the courts' willingness to defne rescue fnancing widely and in the debtor's favour. That is not to say that the courts will grant such applications blindly: the court in Design Studio used the case as an opportunity to clarify the line of inquiry that the courts will take and the level of rigour they are willing to exercise in their interrogation of the proposed fnancing.

With the frst issue resolved, the court summarised the main subsequent factors to be considered in its decision, namely whether:²²

• other creditors' interests are unfairly prejudiced (the court should assess whether those creditors are adequately protected);²³  the restructuring is viable; 
• alternative fnancing has been reasonably explored; and 
• the terms of the proposed fnancing are in good faith, for a proper purpose, and fair, reasonable and adequate.

In particular, the court explained that while evidence of reasonable attempts to procure alternative fnancing should be submitted, it is not necessary for the applicant to show that fnancing was sought from every possible source.

The court also stressed the importance of establishing the viability of the restructuring and whether there is a good probability that it will succeed and rescue fnancing would constitute new funding to create new value. New money is a key factor the court will consider in determining whether the rescue fnancing 'create[s] new value' for the debtor.²⁴

The court referred heavily to a combination of the parliamentary debates and committee reports on the relevant provisions to ascertain the relevant factors to be considered to interpret the legislation correctly.²⁵] As in Attilan, the court also referenced US case law in determining the relevant factors to consider.²⁶

New Silkroutes

In 2023, New Silkroutes successfully applied for super priority for its proposed rescue fnancing to be provided by an existing creditor, 2810198 Ontario Inc (Ontario) under section 67(1)(b) of the IRDA. Ontario proposed to provide new money fnancing to New Silkroutes of S$5.9 million for its working capital requirements, restructuring costs and cash distributions to be made under the then-proposed scheme of arrangement. Ontario's new facility was effectively a roll-up of Ontario's existing working capital loan to the Company. The application was uncontested.

New Silkroutes afrmed the decision in Design Studio that roll-up fnancing is a permitted form of rescue fnancing under the Companies Act and is eligible for super priority.²⁷

Other Cases

There have been two other successful applications for super priority: one was lodged by No Signboard Holdings Ltd (No Signboard) in 2022 and another was lodged by NutryFarm International Limited (NutryFarm) in 2024. 

No Signboard's successful application for super priority confrmed that requiring a successful application for super-priority status as a condition precedent to a rescue fnancing will not be fatal to the application.²⁸

NutryFarm successfully applied for super priority for its proposed rescue fnancing to be provided by an existing creditor, Corpbond IV, under section 67(1)(a) of the IRDA. NutryFarm, incorporated in Bermuda but listed on the Singapore stock exchange (SGX), had already been placed under judicial management. This case confrms that a foreign company listed on the SGX has sufcient nexus to Singapore to make an application under section 67(1).²⁹

TAKING STOCK

The super-priority applications submitted to date reveal some interesting trends.

Low Usage

The small number of cases remains the elephant in the room. Despite the buzz and slew of commentary following the regime's introduction, take-up has been slow. The regime's lack of signifcant uptake also comes at a time of unprecedented economic disruption: the covid-19 pandemic and high interest rate environment that followed have indisputably supressed investor confdence and depressed market activity – all of which have made fnancing difcult to obtain.

This has resulted in an increase in overall domestic restructuring and insolvency activity, with small and medium-sized enterprises representing the bulk of transactions and proceedings. This means that such proceedings are more likely to be predominantly onshore affairs. Nevertheless, this has failed to translate into a corresponding increase in the usage of Singapore's DIP fnancing framework.

Attilan and Design Studio remain the most signifcant cases, dating back to 2017 and 2020, respectively. There has been little jurisprudential development since, which has left several questions unanswered. For example, it is unclear whether a cross-collateralisation arrangement would be granted super priority.³⁰ The absence of contested cases has also left open the question of what constitutes adequate protection for existing security holders.-³¹

Most interestingly, the applications that have been made are clustered towards the lower to mid end of the priority scale (mainly levels 1, 2 and 3). This has left the highest level of super priority (priming under section 67(1)(d) of the IRDA) unused. The effect of this is that the application of Singapore's DIP fnancing regime has not been as radically different from its Asia-Pacifc counterparts as expected, with multiple Asia-Pacifc jurisdictions also offering some combination of priority in line with levels 1, 2 and 3.³²

Several plausible reasons exist for the regime's relatively low uptake, especially when compared with the well-worn path in the US market, including:

1. a perceived preference for simplicity and out-of-court restructuring by Singapore-based debtors and investors, who may feel unequipped to implement more complex new money structures through the courts or to overcome the uncertainty associated with being the frst to use the new structures; 
2. a debtor's preference for leveraging its cross-border connections to use a more tried-and-tested forum such as the United States;
3. cost-beneft considerations, which may lead parties to deprioritise this option because the costs of an application to court, even if uncontested, may be seen as prohibitive; and
4. greater reliance on workouts and the strength of banking relationships to restructure distressed situations.

Regarding point (1), existing stakeholders remain the bulk of creditors that ultimately extend rescue fnancing to debtors. A majority of the DIP fnancing examples discussed above involve DIP facilities extended by existing creditors. Although Singapore is in a unique position, there may be a degree of inertia, bolstered by the lack of tested examples, slowing the Singapore market's enthusiasm for DIP fnancing among existing lenders and perhaps even more so for third-party creditors.

Regarding point (2), the bright lights of the US Bankruptcy Court appear to have remained too tempting for some debtors with US connections. In 2023, Singapore-incorporated Eagle Hospitality Group (Eagle Hospitality)³³ opted to structure its debt restructurings around a reorganisation plan in the United States under Chapter 11 of the US Bankruptcy Code, which featured a new money DIP fnancing facility.³⁴ While Eagle Hospitality ultimately sought and successfully obtained recognition orders in Singapore under section 252 of the IRDA, the reason it did not choose Singapore as the main forum for its restructurings, in which the same fnancing could technically be achieved, is unknown.³⁵

Points (3) and (4) are largely self-explanatory and require no further elaboration.

Ultimately, it is difcult to determine these reasons empirically and defnitively, and it remains to be seen whether the use of Singapore's DIP fnancing regime will pick up in the coming years.

Signifcance Of Parliamentary Intention

All the reported judgments refer to parliamentary debates or committee reports. This refects the courts' willingness, if not desire, to strictly adhere to what can be ascertained of Singapore's parliamentary intention behind the legislation while the body of jurisprudence behind it is still in its infancy. This also signifes a cautious approach to a new area of law in Singapore. It is, therefore, helpful that Parliament has endeavoured to provide unambiguous guidance on the same.

Cross-references to such material are expected to decline over time as more case law develops; however, the cautiously expansive attitude of the courts seems clear, and it is anticipated that the cases following Attilan and Design Studio will only further entrench this trend.

Persuasiveness Of US Case Law

In the absence of domestic precedents, it is not surprising that the courts have relied on US case law to inform their interpretation of the legislation. Many provisions of the IRDA, including section 67(1), have been drafted with guidance from the wording of the US Bankruptcy Code.

The US model has been honed over the approximately 45 years since its introduction, and the resulting body of US case law dwarfs anything Singapore can produce in the short to medium term. A large range of DIP fnancings are used in the United States, with varying levels of complexity and engineering – all of which provide learning opportunities for both the courts and stakeholders.

Flexibility Of The Courts

The courts have been open to multiple DIP fnancing structures and have expressed their willingness to consider the merits of each arrangement.³⁶ This could be interpreted as the courts' acknowledgement of the highly bespoke nature of DIP fnancings and restructurings. Although the courts have not left the door open to all arrangements,³⁷ debtors should feel empowered to present substantiated applications for super priority regardless of the lack of precedent.

APPLES AND ORANGES: SINGAPORE–US REGIME COMPARISON

The US model is the nearest comparator to Singapore's DIP fnancing regime. The wording and structure of section 67(1) of the IRDA closely mirrors the language used in section 364 of the US Bankruptcy Code, from which it drew its inspiration. This has given US case law a fair degree of signifcance in the Singapore courts, and domestic judges have found it to be both informative and persuasive.

The natural conclusion may be that the interpretation of Singapore's DIP fnancing regime should exactly mirror the US model. This notion should be discouraged, and Singapore's jurisprudence should develop objectively to better refect the originating purpose of its DIP fnancing regime (ie, to position Singapore as a sophisticated global restructuring hub) and the particular requirements of stakeholders in the Asian market.³⁸

First, it is a misconception that section 67(1) of the IRDA should be read exactly like section 364 of the US Bankruptcy Code. The threshold for super priority to be granted under the IRDA is arguably higher than that of its US counterpart and diverges from the US Bankruptcy Code on several points, including the following:

• Singapore requires court approval for any type of super priority across all forms of post-petition and debts and expenses. This is not required in the United States, where the new debt can be incurred in the ordinary course of business as an administrative expense. ³⁹ 
• Singapore requires that the court be satisfed that the proposed fnancing comprises a rescue fnancing as defned in the IRDA, whereas there is no similar requirement in the US statutory provisions for the proposed fnancing to be necessary for the survival of the company as a going concern or to achieve a more advantageous realisation of its assets.⁴⁰

Singapore's general mirroring of the US model makes these departures all the more intentional and signifcant.

Further, the much older US model was introduced in a very different market and has had decades to develop. This has seen the coming and going of many trends, preferences and motivations. For example, roll-ups saw an increase in popularity in the United States during the global fnancial crisis because of the tightening credit markets, the balance sheet challenges faced by several banks and the economic downturn – all of which made it more difcult for distressed debtors to obtain fnancing from new creditors. Distressed debtors turned to existing creditors to continue their operations.

The US courts appeared to be more lenient in helping debtors avoid liquidation, with Lyondell's US$8 billion DIP fnancing emerging as one of the largest commercial rescue fnancings during this period.⁴¹ The approval of the fnancing in Lyondell was highly specifc to the facts of the case and the economic climate at the time, which was acknowledged in Design Studio. ⁴² As such, it might not be fair to conclude that the US model is uniformly and staunchly in support of, for example, roll-ups and that Singapore should follow suit.

The US DIP fnancing regime has also seen its own share of changes in popularity. While it is currently experiencing an increase in usage,⁴³ this does not automatically mean the same will or should be true for Singapore, which is a very different market.

OPPORTUNITIES AND PITFALLS FOR DEBTORS AND CREDITORS

While the slow uptake of Singapore's DIP fnancing regime may be somewhat puzzling, the emerging jurisprudence on its application is refreshingly clear. Parties should be assured of the courts' desire to give effect to parliamentary intention, especially where Parliament has been so uniquely unequivocally in favour of the regime's usage. The purpose behind the legislation and its inspiration have been widely documented both in and out of court, and US case law offers a wealth of experience from which to draw inspiration.

Debtors seeking to apply for super priority under the IRDA should not be put off by the lack of precedent. While it may be in its seventh year, development of the legislation is still in its infancy. Applicants should be guided by the courts' attitude and be confdent in submitting new and novel structures.

Those seeking to use it, however, should come prepared. The courts have made it clear that super priority disrupts the expected priority of a company's creditors,⁴⁴ so applications must be supported by a strong argument that the fnancing is necessary and that no alternative can be found. Applicants should present a thorough and well-considered case supported by sound evidence and transaction structures that ft the legislative requirements and emerging case law. Where possible, they should also consider coordinating with their creditors to come to agreements to minimise the risk of challenges and questions of prejudicing their interests without adequate protection. The extent to which an applicant must go to show adequate protection is unclear, but it is recommended to err on the side of caution given the leanings of the courts so far.

COMMERCIAL CONSIDERATIONS FOR SUCCESSFUL DIP FINANCING

The importance of aligning the interests of the prospective DIP fnancier and the existing creditors cannot be overstated. This is well illustrated by Asiatravel and Design Studio- . Where possible, debtors and prospective fnanciers should initiate discussions early to establish common ground on the requirements of the existing creditors (eg, compensation, deleveraging and covenants) and take positive steps to justify the need for a super-priority fnancing to these creditors. An independent third-party opinion in support of super-priority fnancing will be helpful in making the case to the existing creditors.

Effective project management discipline goes a long way to demystifying the process of obtaining DIP fnancing and overcoming some of the challenges of low usage outlined in this article. In this regard, the costs of obtaining DIP fnancing should be clearly mapped out so stakeholders can perform a simple cost-beneft analysis of those costs against the perceived benefts. The process and intervening steps should also be clearly outlined with time frames, and efciencies should be sought wherever possible.

There is no substitute for proper preparation. For example, parties should consider the evidentiary standard established in Attilan (ie, the balance of probabilities) and analyse, as a commercial matter, whether this standard can be met. Financial analysis demonstrating the impact of the proposed DIP fnancing to the survivability of the debtor and the implications for various constituencies in the debtor's value chain (eg, employees, suppliers and creditors) should be compiled and tested against the alternative scenario. This analysis, if positive, will also serve a double duty of persuading the existing creditors of the need for DIP fnancing.

Finally, professional advisers should be engaged to conduct the necessary due diligence, fnancial analysis and market soundings and to render legal advice.

In summary, a successful commercial strategy requires a DIP fnancier with skin in the game and an approach that minimises execution risk.

CONCLUSION

It is too early to write off Singapore's DIP fnancing regime. The restructuring and insolvency space in Singapore, and Asia-Pacifc, is becoming increasingly sophisticated, with companies and lenders seeking new opportunities and structures to achieve their goals. Although the number of applications for super priority under the IRDA have not been as high as expected, this should not be seen as a failure of Singapore's overall restructuring and insolvency regime; rather, it shows that the overall regime is robust and varied enough to offer multiple alternatives.

There remains reason to be optimistic about the performance of Singapore's DIP fnancing in the coming years, and it is expected to be put to greater use as more pan-Asian large-ticket restructurings and distressed debt situations come to market. Large multi-jurisdictional restructurings and distressed debt situations will also see different types of creditors, debtors and restructuring situations appearing before the court. aThese features, coupled with the potential for larger transaction sizes, should also provide greater opportunities for third-party creditors to provide DIP fnancings.

* The authors would like to thank Karen Yap for her contribution to this article. Karen was recently a managing director at Credit Suisse and has over 20 years' experience in risk assessments and mitigation in private credit fnancing and executing high-return exits across diverse markets.

Footnotes

1. Edwin Tong, Second Reading Bills: Insolvency, Restructuring and Dissolution Bill, Parliament No. 13, Session No. 2, Volume No. 94, Sitting No. 83 (1 Oct 2018).

2. Aurelio Gurrea-Martínez, 'The Treatment of Debtor-in-Possession Financing in Reorganization Procedure s: Regulatory Models and Proposals for Reform', European Business Organization Law Review (Forthcoming, 2023), Singapore Management University School of Law Research Paper No. 3/2022 9 (revised 3 Feb 2023), p 3.

3. ibid.

4. Malaysia is the second Asia-Pacifc jurisdiction to enact similar provisions. It did so under its Companies (Amendment) Act 2024, which came into effect on 1 April 2024.

5. The rescue fnancing may be proposed or may have already been obtained.

6. Re Attilan Group Ltd [2017] SGHC 283.

7. ibid at [72].

8. ibid at [73].

9. ibid at [54].

10. ibid at [77].

11. ibid at [56].

12. ibid at [65]–[67].

13. ibid at [51].

14. ibid at [57].

15. In re Asiatravel.comHoldings Ltd and AT Reservation Network Pte Ltd (2019) [unreported]; Ben Clarke, 'Online travel platform obtains Singapore's frst super priority order', GRR (16 Apr 2019).

16. 'Swee Hong granted moratorium of 6 months', The Business Times (13 June 2019).

17. Press release, 'Application for Super Priority under Section 211e of the Companies Act (Cap . 50)', Swee Hong Limited (17 Feb 2020); Jordan Fermanis, 'Engineering company granted second super priority fnancing in Singapore', GRR (24 Feb 2020).

18. Re Design Studio Group Ltd and other matters [2020] SGHC 148.

19. 'Roll-up' fnancing permits an existing creditor to inject new money by way of a new facility, a part of which will repay the existing creditor's pre-fling debt in full or in part. This has the effect of upgrading the existing creditor's pre-fling debt in the post-fling universe by granting it super priority in the latter.

20. Design Studio at [39].

21. ibid at [41]–[42].

22. Ibid, [33].

23. The degree of creditor opposition can also be considered.

24. Design Studio at [25].

25. ibid at [24]–[30].

26. ibid at [31]–[34].

27. Press release, 'Grant of Super Priority Status to Proposed Rescue Financing and Extension o f Moratorium', New Silkroutes Group Limited (3 July 2023).

28. Annual Report, 'A New Chapter', No Signboard Holdings Ltd (11 Jan 2024).

29. Press release, 'Update on Application for Super Priority Rescue Financing under Section 101 (1)(a) of the Insolvency, Restructuring and Dissolution Act 2018'. NutryFarm International Limited (17 Jan 2024).

30. Following the approval of the roll-up fnancing in Design Studio, there has been speculation that the courts could be similarly persuaded to grant super priority to cross-collateralisation arrangements. This has not been tested, and the argument has detractors (eg, Gurrea-Martínez argues that a literal interpretation of the law would reject this hypothesis as a new lien would only be possible for new fnancing obtained after obtaining approval from the court (Gurrea-Martínez, p. 14)).

31. It is possible that, as the courts fnd US case law persuasive overall, the Singapore market will mirror the US model where existing security holders often work in tandem with the debtor to pre-agree terms and provide rescue fnancing to avoid contested cases.

32. Australia, China, Indonesia, Japan, Myanmar, New Zealand, South Korea and Thailand all offer administrative expense priority and security interest over unencumbered property (ie, levels 1 and 3) as types of super priority (see Guerra-Martinez, Table 1).

33. Re Tantleff, Alan [2023] 3 SLR 250; [2022] SGHC 147 (Eagle Hospitality).

34. Eagle Hospitality featured US$100 million in new money debtor-in-possession (DIP) fnancing from new lender Monarch Alternative Capital. The purpose of the DIP facility was to meet the working capital needs of the Eagle Hospitality Group (Eagle Hospitality) while a sale of its properties was arranged. Bank of America, a pre-existing lender and facility agent, initially objected to the arrangement on the grounds that the quantum of the facility was too large and allowed Eagle Hospitality to drag out its Chapter 11 Proceedings for much longer than necessary. It eventually agreed to a settlement after it became clear that the sale of the properties would allow Eagle Hospitality to pay off Bank of America's claims in full.

35. This is not to say that there were no good reasons for choosing the United States as its restructuring form. The assets of Eagle Hospitality being sold as part of its bankruptcy sale included multiple hotels located in the United States. Its DIP fnance lender, Monarch Alternative Capital, also operates out of New York.

36. Design Studio at [46].

37. Specifcally, all types of roll-ups in Design Studio.

38. There are fundamental differences in the fnancing environment in Asia that infuence transaction terms and structures. Although there is undoubtedly some transference from the US markets to Asia-Pacifc markets, this is by no means a wholesale adoption of US terms and structures in the commercial arena.

39. US Bankruptcy Code, section 364(a).

40. IRDA, section 67, paragraphs (1) and (9).

41. In re Lyondell Chemical Company, et al 402 BR 596 (Bankr SDNY 2009); John J Rapisardi and George A Davis, 'Lyondell: the largest commercial DIP in history', Butterworths Journal of International Banking and Financial Law (July/Aug 2009).

42. Although the Court was persuaded by Design Studio's argument that the 'aftermath of the 2008 sub-prime failures . . . was similar to the present economic climate in the wake of COVID-19'. See Design Studio at [63].

43. Reorg reported that DIP pursuits featured in 100 per cent of all prepackaged Chapter 11 Proceedings above US$100 million in 2024. See Josh Neifeld, Jason Sanjana and Ian Howland, 'Prepackaged DIPs Gaining Popularity, Offer Lucrative Terms to Lenders', Reorg (12 Apr 2024).

44. Attilan at [61].

Originally published by GRR.

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