Court dismisses Zipmex’s applications to extend debt moratoria; says liquidation ‘imminent’
Vivienne Tay
THE Singapore High Court has dismissed applications filed by Zipmex Group seeking a short extension of the moratoria that expired on Thursday (Jan 11).
The troubled Singapore-based cryptocurrency company had filed the applications in order to safeguard the proposed sales of its Thailand and Indonesia businesses, even though progress had stalled on these deals.
In a judgment on Thursday, High Court Justice Aedit Abdullah called the context of these applications “unusual”, as Zipmex had sought the extensions despite there being no further prospect of restructuring.
Instead, the extension was sought to protect the proposed sales, which could fall through if insolvency proceedings against Zipmex Group take place.
To recap, Zipmex, a crypto exchange platform, sank into distress in 2022 after a US$53 million exposure to failed crypto lenders Babel Finance and Celsius.
The company applied for debt moratoria, or creditor protection, on Jul 22, 2022, and was later granted multiple extensions until Jan 8, 2024. A short interim extension until Jan 11 was granted pending a court decision regarding Zipmex’s applications.
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In November last year, Zipmex Asia and Zipmex Singapore held scheme meetings in an attempt to restructure. Although Zipmex Asia’s scheme was approved, Zipmex Singapore failed to pass.
As both schemes were interlinked and inter-conditional, neither could be implemented.
“Thus, as things currently stand, by the Zipmex Group’s own admission, there is no further prospect of restructuring, and the liquidation of its constituent companies is likely to be imminent,” said Justice Abdullah.
He concluded that granting an extension of moratoria where there is no further prospect of restructuring would be contrary to the wording and structure of the statutory framework under the Insolvency, Restructuring and Dissolution Act 2018, the legislative purpose underlying the moratorium and existing authority.
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