The backdrop to the event was last year's collapse of OW Bunkers in Singapore and ongoing fall-out from the case in the Singapore market and around the world.
Markel underwriters, Abhishek Chhajer, head of trade credit Asia Pacific and Simon Moi, head of professional and financial risks Asia Pacific, both shared insights on the insurance and risk management implications of insolvency.
Andrew Grimmett, head of restructuring services at Deloitte Singapore and South East Asia and a fellow of the Insolvency Practitioners Association of Singapore, explained the courses of action available in an insolvency. He noted the main objectives of an insolvency regime were to preserve assets, ensure an orderly process and maximise recovery.
The selected regime should also identify the causes of failure and ensure a fair and equitable distribution of assets by class of creditor, he added.
Raelene Pereira, a partner with Singapore corporate lawyers Rajah & Tann, outlined the legal implications of an insolvency and gave a run down on another legal case involving a bunker supplier in Singapore which also ran into difficulties, Free Bunkers Pte Ltd. She noted there were several long running complex legal issues surrounding the case including various claims against the company's directors.
Abhishek Chhajer told the audience that insolvencies and defaults were still higher than during the pre-global financial crisis years.
“On average there are about 350,000 to 400,000 insolvencies every year in about 40 countries where insolvency data is available.
In 2013 around USD 1.9 trillion worth of global trade was insured and credit insurers paid USD 4.5 billion in claims,” he said.
Simon Moi added that a range of interested parties can pursue directors of insolvent companies in the event of collapse.
He said shareholders almost certainly would wish to protect their investment and so too would creditors and vendors over unpaid goods and services rendered.
“Employees can also choose to pursue the insolvent company over unpaid salaries and fringe benefits and so too can regulators, governments and the police if potential fraud and mismanagement of the company is alleged,” he said.
The seminar was the second in a series that Markel International, which underwrites on the Lloyd's Asia Platform, is undertaking in Singapore.