Disposition of Property in Bankruptcy – Can the Court Grant Consent to a Proposed Sale Prior to a Bankruptcy Order

In the course of bankruptcy proceedings, the disposition of property by the bankrupt is subject to a degree of control and restriction, requiring the consent or ratification of the Court. In Re Eng Lee Ling and another matter [2024] SGHC 52, the Singapore High Court considered the scope of the Court’s jurisdiction to grant such approval – specifically, in circumstances where prior approval is sought for a proposed disposition of property, and where a bankruptcy order has yet to be made. The Court also provided general guidance on what it expects of the applicant when applying for prospective approval of proposed dispositions.

The Court in this matter declined to grant consent to a proposed sale of property, finding that the applicants had fallen short in demonstrating how the proposed sale would benefit the general body of creditors, and of the requisite good faith. Chua Beng Chye, Cherie Tan and Foung Han Peow of Rajah & Tann Singapore LLP represented the non-party creditor bank in this matter, successfully resisting the debtors’ applications for the Court’s prospective approval.