Abstract:

Effective  Insolvency  System  which  provides  for  an  efficient  process  for  winding  up  of  the company when the company is in nonviable business and an efficient process for reorganization when the company is in viable business are important elements of the stability of the economy of the country. Restructuring may be a one-time exercise for an organization but it has a lasting effect on the business. The existing insolvency law in Malaysia; Companies Act 1965 and the Companies Winding-up Rules do provide for the efficient process for winding up, however the only provision which encourages the restructuring of the company is the scheme of arrangement under s.176 of the Companies Act 1965. Most often when the company is in financial distress in Malaysia,  it ends  up in winding up process  which advocates the company to  dissolve than  to accomplish  for  restructuring  process.  This  paper  looks  at  the  latest  restructuring trends  in Malaysia and the recent law reform effort under the draft Insolvency Bill. It further discusses the recent insolvency cases and the statistics of companies which had been wound up in Malaysia. It also  analyses  on  the efficiency  of  insolvency  procedures  in  Malaysia  compared  with  other Jurisdictions  and  recommendations  on  the need  to  introduce  amended  laws  relating  to insolvency laws in Malaysia.