In a debt restructuring, giving creditors marginally more than they would receive in a winding up is not always enough. Where a restructuring generates a significant surplus, how should that value be fairly distributed?
Joel Chng, Daniel Liu, Eden Li and Clayton Chong (Partners) explore this in their article, “Singapore: Cross-Class Cramdown Shapes the Concept of Restructuring Fairness”, published in Global Restructuring Review’s Asia-Pacific Restructuring Review 2027.
Drawing on recent UK restructuring decisions and US Chapter 11 jurisprudence, the article examines a key distinction in Singapore’s cross-class cramdown regime: satisfying minimum creditor protections does not necessarily mean that the distribution of restructuring benefits is fair. Differential treatment between creditor classes may be permissible, but must be supported by sound commercial justification and evidence.
The article also considers how proposed reforms, particularly the extension of cross-class cramdown to shareholders, could reshape the balance between creditor protection, shareholder interests and flexibility in corporate rescue.
Read the full chapter below.