mm2 Asia seeks High Court moratorium amid doubts over entertainment group’s continued operations
It has applied for an order to prohibit current, pending or threatened proceedings from being commenced or continued against it
[SINGAPORE] Embattled entertainment group mm2 Asia is seeking a court moratorium that could prohibit winding-up resolutions from being passed for a four-month period, as it pursues a restructuring exercise involving a proposed scheme of arrangement with creditors.
The company’s board also said that mm2 Asia is unable to demonstrate that it can continue as a going concern.
In a bourse filing on Monday (Nov 10), the company said it applied to the High Court of Singapore for a moratorium pursuant to the Insolvency, Restructuring and Dissolution Act. Earlier in the day, it announced that it had received a S$74.6 million payment demand from UOB.
The latest move comes as mm2 Asia attempts to reorganise its business and financial affairs, having received payment demands for millions of dollars from landlords of outlets of its failed cinema chain Cathay Cineplexes since the start of the year.
“The board, having received advice, is of the view that a court-supervised reorganisation process is in the best interests of all stakeholders,” said mm2 Asia, explaining that this would “preserve the value of the group’s core business and allow management to focus on operational continuity”.
With the moratorium application, mm2 Asia is seeking an order to prevent certain actions from being taken against it for a four-month period after the application date.
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It noted that an automatic moratorium came into effect on Monday, the day it made the application. The automatic moratorium will end 30 days after the application date, or when the court decides the application outcome, whichever is earlier.
Under the order that mm2 Asia has applied for, resolutions to wind up the group would not be passed for the four-month period, nor would a receiver or manager of any of the group’s properties or undertakings be appointed.
The order would prohibit current, pending or threatened proceedings from being commenced or continued against mm2 Asia, whether before a court, arbitral tribunal or administrative agency.
It would also prevent legal processes from being commenced, continued or levied against any of mm2 Asia’s properties unless leave is granted by the court.
In addition, the order would prohibit measures to enforce security over any of mm2 Asia’s properties or to repossess any of its goods, and prevents the enforcement of any right of re-entry or forfeiture under leases related to premises occupied by the company.
Shares of mm2 Asia ended Monday 25 per cent or S$0.001 lower at S$0.003, before the news.
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