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When GP APAC, the Singapore arm of Dubai-based commodity trading firm GP Global Group commenced its restructuring process in 2021, nobody could’ve known at the time that the case would eventually culminate in a legal landmark for Singapore’s restructuring regime.

The approval of GP APAC’s restructuring in April of this year is considered the first successful application of the cross-class cramdown (CCCD) provision in Singapore. The provision, which already exists in some foreign jurisdictions including the US and UK (albeit with some language difference, as shown below), allows the court to approve a company’s restructuring plan even if some creditor classes vote against it.

Market participants now anticipate further reforms to be implemented in Singapore that could codify a more accessible CCCD process, and 9fin has expanded to APAC with plans to cover this development in real time.

GP APAC, via its legal advisor Shook Lin & Bok, applied to the Singapore court to cram down fuel supplier Equatorial Marine Fuel Management Services, a dissenting unsecured creditor. Rather than participate in the proposed restructuring plan, Equatorial took separate action to seize and sell GP APAC’s Singapore office — a move that would have given it unfair priority over other creditors.

The court ultimately approved GP APAC’s restructuring scheme, but not before the company established the scheme was fair and equitable by showing that Equatorial would receive a higher recovery under its plan than it would have as an unsecured creditor in a liquidation scenario.

The GP APAC restructuring showcased CCCD as an efficient restructuring tool, saving lawyers from resorting to other workarounds — as some have done in regimes that lack CCCD.

This was apparent in the case of real estate company Sino-Ocean Group, which was advised by Sidley Austin in its debt restructuring which became effective in March. The company had to utilize a parallel restructuring process to invoke CCCD via the English court as the Hong Kong restructuring framework does not contain such a provision.

“The absence of a statutory cross-class cramdown provision in Hong Kong means that, in some cases and in order to unlock complex capital structures, more innovative implementation transaction structures are required for debtors to avail themselves of cross-class cramdown,” said Dhevine Chandrapala, a Hong Kong-based partner at Sidley Austin who advises debtors, private equity firms and hedge funds on cross-border restructurings in Asia and Europe.

The successful use of the CCCD provision in the GP APAC case also comes as the government seeks to position Singapore as a regional restructuring hub.

To attract international debtors, the Singapore government reformed its restructuring and insolvency (R&I) framework to include elements from the US Chapter 11 bankruptcy code. That includes the Companies Act in 2017 and the Insolvency, Restructuring and Dissolution Act in 2018.

Singapore’s Senior Minister of State for Law and Transport Murali Pillai also highlighted these developments in his recent remarks at Turnaround Management Association’s inaugural APAC regional conference in August.

“Our domestic framework now comprises a variety of tools to facilitate efficient restructuring. These include features based on, or those found in, Chapter 11 of the US Bankruptcy Code…[W]e have continued to refine and update our R&I framework, to ensure that it remains relevant to the needs of our evolving economy,” he said during a keynote address.

In March, the Committee to Enhance Singapore’s Corporate Restructuring and Insolvency Regime (the Committee), comprising R&I experts and government officials, published a report detailing recommendations on proposed amendments to improve the existing framework. The Ministry of Law also held a four-week public consultation that ended 8 April.

The Committee recommended further refinements to the CCCD provision in the March report, as indicated here:

The CCCD threshold requirements to be refined to remove conditions requiring a majority in number of creditors representing three-fourths in value of creditors meant to be bound by the proposed scheme to vote in favor of the restructuring plan

The scope of CCCD provisions to be expanded to encompass shareholders in appropriate circumstances, reflecting the economic reality of the debtor’s capital structure in a financially distressed situation

Should the numerosity requirement be removed and the CCCD get extended to shareholders, that would bring Singapore’s CCCD provision more in line with the current UK and US frameworks, as shown below:

“Singapore already has many of the ingredients for a good restructuring regime. But those reforms would be helpful additions that are consistent with the UK restructuring plan and Chapter 11,” Chandrapala said.

The use of CCCD in Singapore is a relatively young concept that has had limited testing by the courts. In the UK and the US, the concept has benefitted from a line of case law that continues to be developed and refined.

For example, this year the English Court of Appeal handed down two landmark decisions — Thames Water and Petrofac — that have materially altered the approach that companies must now take if they wish to cram down a class of creditors. See 9fin’s article on this here.

Now in the UK the interests of out-of-the-money creditors — those that stand to receive no recovery in the restructuring — must be considered by the plan company. In order for the court to exercise its discretionary CCCD powers the court must be satisfied that the benefits created or preserved by the restructuring are fairly allocated amongst creditors.

9fin is continuing to see companies look across multiple jurisdictions — forum shopping — in order to find a R&I process that best meets their needs. These companies are given more comfort and certainty as to their chances of success where there is an established line of case law in that jurisdiction. This is one of the appealing factors for the UK and US.

If the above reforms are successfully implemented into Singapore’s R&I regime, this would lower barriers of entry, potentially increasing the number of schemes that come before the courts, and would allow Singapore to build a stronger body of case law around these principles — which could make it a more attractive jurisdiction for restructuring not just domestically, but in the global market.

Despite the reforms, Singapore’s R&I regime remains largely untested, with a legal source depicting the current pipeline for restructurings in the region as largely quiet.

A Barclays EM corporate credit outlook published on 9 December suggested that most of the stress in Asia credit has been “concentrated in specific, highly indebted issuers,” with the 2026 issuer-weighted default rate for Asia HY corporates forecasted at 1.9% — that’s relatively flat to the 2% in 2025 and down from 3.7% in 2024, according to Barclays’ data.

“The current economy is not very good, but at the same time, its not so bad that many companies are becoming distressed all at once,” the legal source said.

But the same Barclays report also highlighted several factors that could trigger a slowdown or recession in 2026, including “uncertainty about the monetary policy path of the Federal Reserve and central bank reaction to macro data or stickiness of inflation,” in addition to a “potential sharp reversal in the AI narrative.”

The stage is now set for Singapore’s regime being tested, and for more legal milestones similar to the GP APAC case.

Representatives for Equatorial and Shook Lin & Bok did not return a request for comment. GP Global was unavailable for comment.

The Singapore cross-class cramdown provision’s future is now

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