An analysis on the insolvency legal theory of Scheme of Arrangement (SOA) in the rehabilitation of abandoned housing projects in Peninsular Malaysia

If a company is unable to pay its debts, it may be subject to scheme of arrangement (SOA) on the application of the creditors or members or the liquidator or the company itself.'The purpose of SOA is for the SOA manager to take over the affairs of the company in order to settle the debts of the creditors and once all the debts are fully paid, the control of the company will be handed back to the previous management. 'The SOA manager is armed with certain powers and duties in the SOA administration.The benefit of obtaining SOA is to give some time and opportunity to the SOA manager to run the company in order to settle the debts of the company. Moratorium power will be given to the company under SOA against any actions and proceedings by the creditors during the course of the SOA administration.This moratorium power is to allow an SOA manager to exercise the SOA effectively without any interference by the creditors.In respect of the insolvent housing developer company under SOA, similar duties are carried out by the appointed SOA manager, viz to take over the affairs of the company, to settle off all the debts of the creditors, to carry on any housing project and business left by the company if this is expedient in accordance with the law and the wish of the creditors.Once all these have been dispensed with, the affairs and management of the company will be handed back to the previous management