nTan Corporate Advisory Pte Ltd v TT International Ltd
Jurisdiction | Singapore |
Judge | Aedit Abdullah JC |
Judgment Date | 22 August 2017 |
Neutral Citation | [2017] SGHC 207 |
Court | High Court (Singapore) |
Docket Number | Originating Summons No 824 of 2016 |
Published date | 15 November 2018 |
Year | 2017 |
Hearing Date | 20 March 2017,21 February 2017,22 February 2017 |
Plaintiff Counsel | Edwin Tong SC, Kenneth Lim Tao Chung (Kenneth Lin Daocong), Peh Aik Hin, Tham Chuen Min, Jasmine (Tan Jianmin) and Chua Xinying (Allen & Gledhill LLP) |
Defendant Counsel | Chan Hock Keng, Ong Pei Chin, Lawrence Foo and Chong Wan Yee Monica (Zhang Wanyu) (WongPartnership LLP) |
Subject Matter | Companies,Schemes of arrangement,Receiver and manager,Remuneration of |
Citation | [2017] SGHC 207 |
In this case, the plaintiff, a corporate advisory firm, seeks assessment of its professional fees in respect of work done for the defendant company. This assessment is sought pursuant to the orders made by the Court of Appeal in
The plaintiff, nTan Corporate Advisory Pte Ltd (“the Plaintiff”), is a boutique corporate advisory firm. The Chief Executive Officer of the Plaintiff is Mr Nicky Tan Ng Kuang (“Mr Nicky”).1
The defendant company, TT International Limited (“the Defendant”), was locally incorporated in 1984 as a private limited company and was subsequently listed on the Main Board of the Singapore Exchange Securities Trading Limited (“the SGX Main Board”) in 2000. At the material time, the Defendant was primarily involved in the business of consumer electronics, being the main distributor and licensee of the AKIRA brand of electronic products worldwide. It was founded by a couple, Mr Sng Sze Hiang and Ms Tong Jia Pi Julia (collectively, “the Sngs”). While its business appeared to do well, it incurred losses from foreign exchange derivatives, and had large loans, entailing personal guarantees from the majority shareholders of the company, the Sngs. Following the global financial crisis in 2008, the company’s position worsened, as credit dried up while it had outstanding claims from creditors amounting to some $607.03m.2
In the midst of this, the Defendant had embarked on the construction of the Big Box, a development of a retail complex in Jurong East (“the Big Box Project”). Unsurprisingly, the Defendant ran into difficulties financing the project; an adjudication award was even made against it. In this connection, personal guarantees and loans had to be provided by its founders and majority shareholders,
It was against this backdrop that the Plaintiff was appointed by the Defendant as its independent financial advisor4 by an appointment letter dated 28 October 2008. That letter, read together with another letter dated 15 May 2009, constituted the terms of the engagement for the Plaintiff’s work as the Defendant’s independent financial advisor (“the Contract”).5
Under the terms of the Contract, the Plaintiff was to be paid time costs based on hourly rates set out in the letters of engagement, disbursements, and a “Value-Added Fee” (“the VAF”). The parties had keenly negotiated the Contract, with particular focus on the VAF component.6 The VAF was to be paid on the occurrence of various events, including the obtaining of new funds or the approval of a scheme of arrangement. The VAF comprised of “7.5% of the Net Value of Debt Resolved” and “5.0% of Total Gross Transaction Value” (“the VAF Formula”).7 In simple terms, the VAF was a percentage of the amount of debt owed by the Defendant to its creditors which was “waived, written off, extinguished, forgiven or avoided” or converted into equity in the Defendant pursuant to the anticipated scheme of arrangement. Separately, it also included a percentage of an increase in value of the Defendant through the raising of new funds, loans or assets arising from the Plaintiff’s efforts.8 Hence, the greater the value of the debt rendered not payable as well as the higher the increase in the Defendant’s value, the greater the amount of the VAF the Plaintiff stood to receive. For this reason, the VAF is also described as “a success fee”.
Following its appointment, the Plaintiff embarked on work,9 the value and effect of which is disputed between the parties. As it was, a scheme of arrangement was approved by the High Court in March 2010. However, a revote was subsequently ordered by the Court of Appeal in August 2010. At the revote, the scheme was approved again. This scheme was approved by the Court of Appeal on 13 October 2010 (“the Scheme”),10 resulting in three personnel from the Plaintiff being named as the scheme managers11 (“the SM”) and the Plaintiff becoming entitled to the VAF under the Contract.
The Scheme included the following aspects:12
The Plaintiff was an “excluded creditor” under the terms of the Scheme, which meant that the VAF was not subject to the Scheme. Materially, the VAF was not disclosed to the Scheme’s Management Committee of creditors (“the MC”) or the court prior to the Court of Appeal’s sanction of the Scheme. It was only almost a year after the Scheme was sanctioned that details of the VAF were disclosed to the MC. Thereafter, in 2012, the MC sought directions from the Court of Appeal on the payment of the VAF to the Plaintiff. The matter was of some controversy between the parties.13 Eventually, the Court of Appeal in
[emphasis added]
It bears mention that the Plaintiff sought to set aside the decision in
Up till the present proceedings, in addition to an initial $500,000 non-refundable deposit (“the Deposit”), the Defendant has already paid $10,266,164 to the Plaintiff. This $10,266,164 corresponds to all of the Plaintiff’s billed time costs for the period from 28 October 2008 to 31 May 2011 (“the Billed Time Costs”), save for a sum of $401,150 for April 2009, for which the Plaintiff had initially issued a credit note (“the Credit Note”).
The MC was not part of the present proceedings. However, a number of creditors,
The Plaintiff’s claim for its global fees is set out as follows:14
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The Plaintiff argues that the agreement between the parties,
The Contract was neither set aside nor challenged. This contractual arrangement arose out of extensive negotiations and indicated what was fair, reasonable and adequate remuneration, as mandated in
The VAF Formula reflects the direct and tangible benefit derived by the Defendant from the Plaintiff’s work. It provided full...
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NTan Corporate Advisory Pte Ltd v TT International Ltd
...of 2017, the appellant appealed against the Judge's decision. [Editorial note: This was an appeal from the decision of the High Court in [2017] SGHC 207.] Peh Aik Hin, Jasmine Tham and Chia Su Min, Rebecca (Allen & Gledhill LLP) for the Ong Pei Chin and Chong Wan Yee Monica (WongPartnership......