A liquidator arrives at a desk that is rarely tidy. Records may be incomplete, former management uncooperative, and assets overseas or already on the move. The Insolvency, Restructuring and Dissolution Act 2018 (the “IRDA”) confers a substantial set of investigative powers to do that work, and recent decisions have clarified both the standard the court holds a liquidator to and the standard a creditor or counterparty must meet to challenge or to support those decisions. This primer maps the toolkit and the decisions that frame it.
Obtaining Information: Examination and Production Powers
Information-gathering is one of the most important early tasks of a liquidator, and it is where many recoveries fall apart. Where records are missing or held by uncooperative parties, section 244 of the IRDA is the primary statutory tool. On the application of the liquidator, the court may summon any officer of the company, any person known or suspected to hold company property, or any person able to give information about the company’s affairs; and require them to submit an affidavit, containing an account of their dealings with the company and/or producing documents related to the affairs of the company.
In Zhu Su v Three Arrows Capital Ltd [2025] 1 SLR 968, the Court of Appeal confirmed that section 244(1) confers two distinct and independent discretions: to summon a person to appear, and to require a person to submit an affidavit. Unlike the predecessor section 285 of the Companies Act, section 244(1) does not require a person to be summoned before being ordered to produce. A liquidator should not therefore be deterred from seeking production simply because oral examination would be premature.
The Court did, however, set aside the examination order made against one of the company’s former directors. By the time the liquidators applied for it, they had already formed the intention to sue him in another jurisdiction but had not disclosed that fact to the Court. Where a liquidator already intends to sue an examinee, the starting point is that the examination should not be ordered, since it risks being used to gather evidence for the intended civil action, and the non-disclosure is a breach of the duty of full and frank disclosure on a without-notice application.
The predecessor section 285 was held to have extra-territorial effect in Xu Wei Dong v Midas Holdings Ltd [2025] 4 SLR 206, and the same reasoning is likely to apply to section 244. A liquidator may therefore seek production from overseas record-keepers, subject to comity and a sufficient connection with Singapore.
Adjudicating Creditor Claims: Challenges to the POD
The proof of debt (“POD”) adjudication is, in a contested insolvency, one of the most consequential processes in a liquidation: it is the gateway through which a creditor’s claim is admitted and sets the benchmark for recovery. Two recent decisions on rule 133 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020 are instructive on who bears the burden of proving its proper adjudication.
Where a creditor challenges a liquidator’s adjudication of another creditor’s POD under rule 133(2), the liquidator bears the burden of satisfying the court, on a balance of probabilities, that the POD was properly adjudicated: Park Hotel Group Management Pte Ltd v Aw Eng Hai [2026] 3 SLR 777 (affirmed in part on appeal). The court hears the matter de novo. As Audrey Lim J observed, a liquidator exercises a quasi-judicial function in adjudicating a POD, and verification is not a mere administrative function. A contested admission cannot be defended by pointing to the disputing creditor’s lack of evidence or by directing it to the POD creditor’s own papers. The liquidator’s affidavit must explain how the decision to admit each claim was reached, with reference to the supporting documents and the basis on which the quantum was computed. A one-page admission letter of the sort filed in Park Hotel, falls well short of that standard.
The mirror application (by a liquidator under rule 133(1) to expunge a previously admitted POD) was the subject of the Court of Appeal’s decision in Yit Chee Wah v Inner Mongolia Huomei-Hongjun Aluminium Electricity Co [2025] 1 SLR 1110. Under the two-limb test, the liquidator must first show on a prima facie standard that the POD was improperly admitted, typically by identifying a mistake of fact or law without which the proof would have been rejected (and being forthcoming about how the improper admission came about). The first limb does not require proof, on a balance of probabilities, that the underlying debt is invalid. Once it is cleared, the burden shifts to the creditor to prove the debt afresh on a balance of probabilities, with the court free to go behind documents that appear to support the claim (including even a foreign arbitral award) where the underlying transactions are doubtful. In Yit Chee Wah itself, vessel-tracking data contradicted the bills of lading produced by the creditors in support of their PODs. The creditors failed to discharge the second limb, and their PODs were expunged.
Pursuing recoveries: the avoidance toolkit
Where the investigation reveals transactions that warrant unwinding, the IRDA provides a coherent suite of avoidance provisions:
• section 224 — transactions at undervalue;
• section 225 — unfair preferences;
• section 238 — fraudulent trading;
• section 239 — wrongful trading; and
• section 240 — misfeasance or breach of trust or duty.
A recent decision of note on valuation under section 224 is SW Trustees Pte Ltd (in compulsory liquidation) v Teodros Ashenafi Tesemma [2025] 3 SLR 1027. The claimant company had sold a stake in a subsidiary to its only other shareholder, who had particular reasons to pay a premium to consolidate control. The contract price for the sale was approx. US$10.8m. The company’s liquidator brought a section 224 claim, claiming the sale to be at undervalue, with its expert valuing the stake at US$15m–US$16m on an “Equitable Value” basis (the price reflecting the respective interests of identified knowledgeable and willing parties, considering their respective advantages and disadvantages). The defendant’s expert valued it at US$1.1m–US$1.9m on a “Market Value” basis (the value to a hypothetical participant in an arm’s-length transaction). The court held that the relevant standard for section 224 is Market Value, since section 224 protects creditors by reference to what the asset could fetch from the world at large, not what it might be worth subjectively to a particular counterparty. The latter approach would also create uncertainty and unfairness. The plaintiffs’ valuation was rejected as flawed (as being, among other things, overly optimistic and speculative), and the claim failed.
A composite picture
Recent decisions outline a more contested, and more transparent investigation regime. Liquidators are expected to document adjudications contemporaneously, plead with discipline, and disclose what the court needs to know; and creditors have a more potent toolkit than is sometimes assumed. Often, investigations translate into recovery where directors’ conduct can be tested against the duties they owe, or where the avoidance provisions can be deployed against connected parties. The next article in this series will examine these areas in greater detail.
