SICC in [2026] SGHC(I) 22 formulates three-part test for scrutinising non-voting administrative convenience classes in schemes of arrangement.
The SICC established that courts must scrutinise non-voting administrative convenience classes even absent creditor disagreement, applying a three-factor test: (1) substantiated gains in efficacy, feasibility or convenience; (2) prejudice to class members and affected outsiders; and (3) absence of gerrymandering or abuse of cram-down mechanisms. The court drew on US jurisprudence under § 1122(b) of the US Bankruptcy Code but emphasised that Singapore law requires this judicial scrutiny in all cases. The court expressly left open whether an impaired non-voting administrative convenience class could be sanctioned.
Why it mattersPractitioners structuring schemes of arrangement must now rigorously justify non-voting administrative convenience classes against this three-part framework, even where creditors do not object.