HODLNAUT PTE. LTD.

"In the end what mattered to my mind was that on present evidence, the assets were probably in some jeopardy and that the directors and management of the Company would not be able to function without being liable for insolvent trading at this time." — Per Aedit Abdullah J, Para 7

Case Information

• Citation: [2022] SGHC 209 (Para 0)
• Court: General Division of the High Court of the Republic of Singapore (Para 0)
• Date of Judgment: 31 August 2022 (heard on 22, 26, 29 August 2022) (Para 0)
• Coram: Aedit Abdullah J (Para 0)
• Case Number: Originating Application 451 of 2022 (Summons No 3011 of 2022) (Para 0)
• Area of Law: Insolvency Law — Judicial management — Interim judicial management (Para 0)
• Counsel for the Applicant: Ong Ziying Clement, Ning Jie, Darius Malachi Lim Wen Hong, Leonard Chua Jun Yi and Lim Dao Yuan Keith (Damodara Ong LLC) (Para 0)
• Counsel for the Attorney-General (watching brief): Olivia Low and Clement Lim (Attorney-General’s Chambers) (Para 0)
• Counsel for the Judicial Managers of S.A.M. Fintech Pte Ltd and Samtrade Custodian Limited: Patrick Ang and Ho Ziwei (Rajah & Tann Singapore LLP) (Para 0)
• Counsel for Algorand Foundation Ltd: Daniel Chan and Levin Low (WongPartnership LLP) (Para 0)
• Counsel for Kong Xie Shern: Mato Kotwani, Gerard Quek and Glenn Chua (PDLegal LLC) (Para 0)
• Counsel for Brian Gothong Tan: Abraham Vergis SC and Lim Mingguan (Providence Law Asia LLC) (Para 0)

Summary

This was a brief remarks judgment on Hodlnaut Pte Ltd’s application for the appointment of interim judicial managers under Part 7 of the Insolvency, Restructuring and Dissolution Act. The court explained that the application raised two distinct questions: whether an interim judicial management order should be made at all, and if so, who should be appointed to carry it out. There was no opposition to the making of the order itself; the real contest concerned the identity of the appointees. (Paras 1, 3, 4)

The court applied the criteria for interim judicial management drawn from Re KS Energy and another matter, namely that there must be a prima facie case for a full judicial management order, usually some danger to the company’s assets, and some urgency or exigency. On the evidence before it, the court considered that the company’s recovery plan, standing alone, was insufficient to displace the need for interim protection. The judge’s central concern was that the assets were probably in jeopardy and that the directors and management could not safely continue without risking insolvent trading. (Paras 5, 6, 7)

On the appointment question, the court was faced with competing nominations from the company and from Samtrade, after the court had invited further nominations from other creditors as well. The judge accepted that there could be legitimate concerns about the perceived independence of judicial managers who might have to determine the status of a creditor in a contested insolvency setting. In the end, the court preferred two Ernst & Young practitioners, Ms Angela Ee and Mr Aaron Loh, because that choice best avoided independence concerns in a matter involving many unsecured creditors and a complicated process. (Paras 2, 9, 11, 12, 13, 14)

What were the two issues the court had to decide on the interim judicial management application?

The court framed the application in a disciplined two-stage way. First, it had to decide whether an interim judicial management order should be made at all. Second, if the threshold for interim protection was met, it had to decide whom to appoint as interim judicial managers. That framing mattered because the hearing was not simply about whether the company should be placed under temporary protection; it was also about the practical and institutional question of who should control the process during the interim period. (Paras 3, 4)

"There are two issues the Court had to consider in deciding the application. Firstly, whether an IJM order should be made, and secondly, whom should be appointed by the Court to serve as interim judicial managers." — Per Aedit Abdullah J, Para 3

The judge also made clear that the second issue was the one attracting the most attention at the hearing. There was no opposition to the making of the IJM order, so the contest shifted to the identity of the proposed appointees. That procedural posture is important for practitioners because it shows that even where the statutory threshold for interim judicial management is not seriously disputed, the appointment of the office-holder can still be intensely contested. (Para 4)

"There was no opposition at the hearing to the making of the IJM order. Rather, the focus was on the persons to be appointed under that order." — Per Aedit Abdullah J, Para 4

The court’s treatment of the issues also shows that interim judicial management is not a purely formal step. The judge treated the appointment decision as part of the substantive protection of the estate, not as an administrative afterthought. The identity of the interim judicial managers was therefore assessed against the background of asset preservation, creditor confidence, and the practical need to avoid conflicts or perceptions of conflict in a complex insolvency environment. (Paras 11, 12, 13)

Why did the court say the interim judicial management threshold was met?

The court relied on the criteria and rationale stated in Re KS Energy and another matter. The judge quoted the proposition that a prima facie case for a full judicial management order must exist, though not every criterion for a full order need be satisfied, and that usually there must be some danger to the company’s assets together with urgency or exigency. That was the legal framework the court used to test the application. (Para 5)

"The criteria and rationale for the making of an order for IJM were considered in Re KS Energy and another matter [2020] 5 SLR 1435 at [14] and [15]: there must be a prima facie case for the making of a full judicial management order, though not all criteria for the grant of a full order need be met; and usually there must be some danger to the assets of the company. Some sort of urgency or exigency must be shown." — Per Aedit Abdullah J, Para 5

Applying that framework, the court rejected the notion that the mere existence of a recovery plan was enough. The judge said that reliance on the development of a plan for recovery for the business, by itself, was not sufficient. The point was not that a recovery plan was irrelevant, but that it could not on its own answer the concern that the company’s assets might be at risk and that immediate protective intervention might be needed. (Para 6)

"Reliance was placed by the Company on the development of a plan for recovery for its business. However, this by itself was not enough." — Per Aedit Abdullah J, Para 6

The decisive consideration was the judge’s assessment of the present evidence. The court concluded that the assets were probably in some jeopardy and that the directors and management would not be able to function without exposing themselves to liability for insolvent trading. That finding supplied both the danger-to-assets element and the practical urgency needed for interim judicial management. In other words, the court was not persuaded that ordinary management could safely continue while the company worked through its recovery efforts. (Para 7)

"In the end what mattered to my mind was that on present evidence, the assets were probably in some jeopardy and that the directors and management of the Company would not be able to function without being liable for insolvent trading at this time." — Per Aedit Abdullah J, Para 7

How did the court treat the company’s recovery plan and the argument that interim judicial management was unnecessary?

The company’s position was that it had a recovery plan for its business, and that this should weigh against the making of an interim judicial management order. The court did not dismiss the relevance of a recovery plan altogether, but it treated the argument as insufficient on its own. The judge’s reasoning was that a plan in development does not necessarily neutralise the immediate risks that justify interim intervention, especially where the evidence suggests that assets may be in jeopardy. (Para 6)

The court’s response was therefore not a rejection of restructuring efforts as such. Rather, it was a recognition that interim judicial management serves a protective function when the company’s present condition makes continued management risky. The judge’s focus was on the immediate state of affairs: whether the company could safely continue without the safeguard of interim office-holders. The answer, on the evidence, was no. (Paras 5, 6, 7)

"What was before me fell short of this." — Per Aedit Abdullah J, Para 6

That conclusion is significant because it shows that the court was not prepared to let a recovery narrative displace the statutory and practical need for protection. The judgment indicates that the court will look beyond aspirational restructuring steps and ask whether the company’s assets and management position require immediate supervision. Where the answer is affirmative, the existence of a recovery plan will not prevent interim judicial management. (Paras 5, 6, 7)

Why did the court consider the appointment of the interim judicial managers to be a contested and fact-sensitive exercise?

The appointment issue became contested because both the company and Samtrade had concerns about the other side’s nominees. The judge noted that this set the stage for competing nominations, and he invited the other creditors present to put forward additional names. That procedural move underscores that the court was not simply choosing between two fixed options; it was managing a broader creditor-sensitive process in which independence and confidence mattered. (Para 2)

"This set the stage for competing nominations for appointment as interim judicial managers from the Company and Samtrade. I then invited the other creditors present at this initial hearing to put forward other nominations." — Per Aedit Abdullah J, Para 2

The court also emphasised that the appointment power is fact dependent. In addressing the Malaysian decision of Jepak Holdings Sdn Bhd v TNB Repair and Maintenance Sdn Bhd & Ors, the judge said he did not think it assisted in the present case because the exercise of the power of appointment depends on the facts, and he did not understand Jepak Holdings to be laying down a general rule. If it went further than a factual determination, the judge respectfully declined to follow it. (Para 10)

"With respect, I did not think that Jepak Holdings assisted in the present case; the exercise of the power of appointment is fact dependent, and I did not understand Jepak Holdings to be laying down a general rule. If it went further than a factual determination, I respectfully declined to follow it." — Per Aedit Abdullah J, Para 10

That approach is important because it shows that the court did not treat appointment as a mechanical exercise governed by rigid rules. Instead, the judge treated it as a contextual judgment informed by the nature of the insolvency, the number of creditors, the existence of competing nominations, and the need to preserve confidence in the process. The court’s reasoning therefore linked the appointment decision to the practical administration of the estate. (Paras 11, 12, 13)

How did the court deal with concerns about independence and perceived conflicts in the appointment of judicial managers?

The court accepted that other creditors may have doubts about the perceived independence of judicial managers, whether interim or otherwise, especially where those office-holders may have to rule on the status of a creditor. That acknowledgment is important because it shows the judge was alive to the reality that insolvency appointments can generate suspicion even absent actual bias. The issue was not merely whether a nominee was in fact independent, but whether the appointment would inspire confidence in a contested process. (Para 11)

"I also accepted the Company’s arguments that other creditors may have some doubts about the perceived independence of judicial managers (interim or otherwise), who may have to rule on the status of that creditor." — Per Aedit Abdullah J, Para 11

The judge then explained why that concern mattered more in this case. The context involved preserving and safeguarding assets where a large number of unsecured creditors were involved. In such a setting, the process was likely to be complicated enough already, so the court considered it best to choose an appointment that would avoid, as far as possible, any concerns about independence. The reasoning was pragmatic: even if a nominee is qualified, a contested insolvency may benefit from a choice that reduces friction and suspicion. (Para 12)

"But in the context of preserving and safeguarding assets where a large number of unsecured creditors are involved, it was to my mind best to have an appointment that would avoid as best as possible any concerns about independence: the process will be likely be complicated enough as it is." — Per Aedit Abdullah J, Para 12

The court also made clear that the appointment exercise is fact-sensitive and that different factors may matter in different cases. That meant the judge was not announcing a universal rule that any perceived conflict disqualifies a nominee. Instead, the court was balancing the practical need for neutrality against the reality that insolvency practitioners often operate in environments where some creditors may question their independence. The result was a contextual preference for the nominees who best reduced those concerns. (Para 13)

"It will be a fact sensitive exercise, with the court having to consider different factors from case to case." — Per Aedit Abdullah J, Para 13

Why did the court prefer the Ernst & Young nominees over the other proposed candidates?

The court’s final choice was Ms Angela Ee and Mr Aaron Loh from Ernst & Young. The judge said there was little to separate the two sets of nominees put forward by the other creditors: both sets were experienced, extremely qualified to act as judicial managers, and would have had the appropriate technical support. That finding is important because it shows the decision was not based on a lack of competence in the other nominees. (Para 14)

"There was little to separate the two sets of nominees put forward today by the other creditors; both sets of persons are experienced and extremely qualified to act as judicial managers, and would have had the appropriate technical support." — Per Aedit Abdullah J, Para 14

What tipped the balance was the judge’s preference for an appointment that would avoid concerns about independence. In a case involving the preservation and safeguarding of assets and a large unsecured creditor body, the court considered that neutrality and the appearance of neutrality were especially valuable. The appointment of the Ernst & Young practitioners was therefore a practical solution to a process that was already likely to be complicated. (Paras 12, 14)

"In the end, I chose Ms Angela Ee and Mr Aaron Loh from Ernst and Young; this should not be taken as any slight by the other set of nominees." — Per Aedit Abdullah J, Para 14

The judge’s caveat that the choice should not be taken as any slight by the other nominees reinforces that the decision was not a criticism of their competence or integrity. Rather, it was a case-management and confidence-based selection made in the interests of the estate. For practitioners, the lesson is that where multiple qualified nominees are available, the court may choose the pair that best minimises perceived conflicts and facilitates orderly administration. (Paras 12, 14)

What role did the competing creditor positions play in the court’s reasoning?

The judgment shows that creditor positions were central to the appointment question. The company and Samtrade each had concerns about the other side’s nominees, and the court responded by inviting other creditors to propose alternatives. That step broadened the field and reduced the risk that the appointment would be seen as captured by one side’s preferences. It also reflects the court’s sensitivity to the dynamics of a multi-creditor insolvency. (Para 2)

"This set the stage for competing nominations for appointment as interim judicial managers from the Company and Samtrade. I then invited the other creditors present at this initial hearing to put forward other nominations." — Per Aedit Abdullah J, Para 2

The court’s acceptance that creditors may have doubts about the perceived independence of judicial managers who may have to rule on a creditor’s status also explains why creditor positions mattered so much. In a process where the office-holder may need to make decisions affecting creditor standing, the appearance of neutrality can be as important as actual expertise. The judge therefore treated the creditor landscape as part of the appointment calculus, not as background noise. (Para 11)

That approach is consistent with the court’s broader concern to preserve and safeguard assets in a complicated process involving many unsecured creditors. The more numerous and diverse the creditor body, the more important it becomes to appoint office-holders who can command confidence across the board. The judgment therefore illustrates how creditor relations can shape the practical administration of interim judicial management. (Paras 12, 14)

What does the judgment say about the relationship between interim judicial management and insolvent trading risk?

The judgment makes the risk of insolvent trading central to the need for interim judicial management. The court found that the directors and management of the company would not be able to function without being liable for insolvent trading at that time. That finding is not merely descriptive; it explains why interim office-holders were needed to take over the management function and protect the company from further deterioration. (Para 7)

"In the end what mattered to my mind was that on present evidence, the assets were probably in some jeopardy and that the directors and management of the Company would not be able to function without being liable for insolvent trading at this time." — Per Aedit Abdullah J, Para 7

This reasoning links the statutory threshold to practical corporate governance. If management cannot continue without exposing itself to insolvent trading risk, then interim judicial management becomes a mechanism for preserving the estate while avoiding unlawful or imprudent trading decisions. The court’s analysis therefore shows that interim judicial management is not only about asset preservation in the abstract; it is also about creating a lawful management structure during financial distress. (Paras 5, 7)

For insolvency practitioners, the significance is that the court will look at the company’s operational reality, not just its formal plans. Where the evidence suggests that directors cannot safely continue, the court may intervene even if a recovery plan exists. The judgment thus ties the interim remedy to the immediate governance risks facing the company. (Paras 6, 7)

How did the court use the cited authorities, and what did it say about Jepak Holdings?

The principal authority used for the interim judicial management threshold was Re KS Energy and another matter. The court relied on it for the proposition that a prima facie case for a full judicial management order is required, though not every criterion for a full order need be met, and that there must usually be some danger to the assets and some urgency or exigency. That authority supplied the legal framework for the first issue. (Para 5)

"The criteria and rationale for the making of an order for IJM were considered in Re KS Energy and another matter [2020] 5 SLR 1435 at [14] and [15]: there must be a prima facie case for the making of a full judicial management order, though not all criteria for the grant of a full order need be met; and usually there must be some danger to the assets of the company. Some sort of urgency or exigency must be shown." — Per Aedit Abdullah J, Para 5

By contrast, the court did not accept that Jepak Holdings provided a useful general rule for the appointment question. The judge said the case did not assist because the appointment power is fact dependent, and he did not understand Jepak Holdings to be laying down a general rule. If it went further than a factual determination, he respectfully declined to follow it. That is a careful and limited treatment of foreign or comparative authority. (Para 10)

"With respect, I did not think that Jepak Holdings assisted in the present case; the exercise of the power of appointment is fact dependent, and I did not understand Jepak Holdings to be laying down a general rule. If it went further than a factual determination, I respectfully declined to follow it." — Per Aedit Abdullah J, Para 10

The court’s treatment of the authorities shows a clear hierarchy in reasoning. Re KS Energy was used as the governing local authority for the threshold test, while Jepak Holdings was considered but not treated as controlling or broadly applicable. The result is a judgment that reinforces the local Singapore approach to interim judicial management while resisting any attempt to convert a fact-specific appointment decision into a rigid rule. (Paras 5, 10, 13)

Why does this case matter for insolvency practitioners and creditors?

This case matters because it clarifies how the court approaches interim judicial management where the company is in distress but there is no opposition to the making of the order itself. It shows that the court will still scrutinise whether the statutory and practical criteria are met, and that a recovery plan alone will not necessarily prevent interim intervention. Practitioners should therefore treat the existence of a restructuring proposal as relevant but not decisive. (Paras 5, 6, 7)

"It is published primarily for the benefit of the unsecured creditors as well as for the guidance of lawyers and insolvency practitioners." — Per Aedit Abdullah J, Para 1

The case is also important because it demonstrates how the court handles competing nominations for interim judicial managers. The judge’s emphasis on perceived independence, especially in a case with many unsecured creditors, suggests that appointment decisions may turn on confidence in the process as much as on technical qualifications. That has practical implications for how parties propose nominees and how they frame objections. (Paras 11, 12, 14)

Finally, the judgment is useful because it confirms that the court will make a pragmatic, fact-sensitive choice where multiple qualified nominees are available. The court did not criticise the losing nominees; it simply preferred the set that best avoided independence concerns. For creditors and applicants alike, the lesson is that appointment strategy should account for both competence and the optics of neutrality. (Paras 13, 14)

Cases Referred To

Legislation Referenced

• Insolvency, Restructuring and Dissolution Act (No 40 of 2018), Part 7 (Para 0)
• Insolvency, Restructuring and Dissolution Act (No 40 of 2018), section 91 (Para 0) [CDN] [SSO]
• Insolvency, Restructuring and Dissolution Act (No 40 of 2018), section 92 (Para 0) [CDN] [SSO]
• Insolvency, Restructuring and Dissolution Act (No 40 of 2018), section 99 (Para 0) [CDN] [SSO]

What is the practical takeaway from the court’s final order?

The practical takeaway is that interim judicial management will be granted where the evidence shows a real risk to the company’s assets and a continuing management risk, even if the company is pursuing a recovery plan. The court’s focus was on present jeopardy and the inability of management to continue without insolvent trading exposure. That makes the remedy a protective one, designed to stabilise the company before a fuller judicial management decision or other restructuring steps are taken. (Paras 5, 6, 7)

The appointment takeaway is equally important. Where there are competing nominations and concerns about independence, the court may choose nominees who best preserve confidence in the process, especially where the creditor body is large and unsecured. The judgment therefore teaches that the best nominee is not always the most technically qualified in the abstract; it may be the one whose appointment most effectively supports the integrity of the insolvency process. (Paras 11, 12, 13, 14)

For lawyers advising distressed companies or creditors, the case underscores the need to prepare both the threshold case for interim protection and the appointment strategy. It is not enough to show that a restructuring plan exists. Parties must also be ready to address asset risk, urgency, management risk, and the optics of independence in the proposed office-holders. (Paras 5, 6, 7, 11, 12, 14)

How did the court conclude the matter?

The court concluded by making the interim judicial management order and appointing Ms Angela Ee and Mr Aaron Loh from Ernst & Young as the interim judicial managers. The judge expressly noted that the choice should not be taken as any slight against the other nominees, which reinforces the fact-sensitive and pragmatic nature of the decision. The order was therefore both protective and calibrated to the realities of the creditor landscape. (Paras 2, 14)

"At the further hearing, I determined that an interim judicial management (“IJM”) order should be made, and that two insolvency practitioners from Ernst & Young be appointed as interim judicial managers." — Per Aedit Abdullah J, Para 2

The judgment closes the loop between the legal threshold and the practical appointment decision. The court found the assets were probably in jeopardy, that management could not safely continue, and that the appointment should avoid independence concerns as far as possible. Those findings together explain why the court granted the application and selected the Ernst & Young nominees. (Paras 7, 12, 14)

In that sense, the case is a compact but useful illustration of how Singapore’s interim judicial management regime operates in practice: threshold, urgency, asset protection, creditor confidence, and pragmatic appointment all interact. The judgment is brief, but its reasoning is clear and highly usable for insolvency practice. (Paras 1, 3, 5, 12, 13, 14)

Source Documents

• Original Judgment — Singapore Courts
• Archived Copy (PDF) — Litt Law CDN

This article analyses [2022] SGHC 209 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.