Valid claims against Jannie Chan’s bankruptcy estate balloon by S$18.9 million
Source: Business Times
Article Date: 21 Feb 2025
Author: Tay Peck Gek
The court also dismisses her application to set aside the S$4.3 million in claims from SME Care that the private trustee has accepted as valid.
The valid claims against high-society figure Jannie Chan have risen by S$18.9 million, after the High Court on Wednesday (Feb 19) accepted a creditor’s previously rejected debts.
Chan, the co-founder of mainboard-listed luxury timepiece retailer The Hour Glass : AGS 0%, was declared bankrupt in 2019.
The loan that she had guaranteed for JASC – one of the firms where she was the sole director and shareholder – was overdue. It landed her in bankruptcy when the licensed moneylender SME Care sought to have her honour the guarantee.
Yit Chee Wah acts as the private trustee of her estate, and has the duty to examine the debts submitted by creditors, and to determine whether to admit or reject these claims.
The trustee will distribute the bankrupt’s assets only to creditors who have debts that have been genuinely created and are legally due.
Fulcrum Distressed Partners, one of Chan’s creditors, had two sums totalling S$18.9 million initially rejected by the private trustee.
The boutique investment firm, which specialises in the trading of distressed and special situation investment opportunities, had taken over the debts from Chan’s original creditor, Timor Global.
Timor Global submitted S$21.5 million in total claims, but Yit accepted only S$2.6 million as valid debts against Chan.
It is unclear how much of Chan’s total liabilities have been deemed valid, as this piece of information was not mentioned in the judgment, and her net worth was not revealed. The Business Times has reached out to Yit through his lawyer.
The High Court, however, ruled that the S$18.9 million claimed by Fulcrum Distressed Partners is valid.
The first debt amounting to S$15.8 million arose from transfers between two firms related to Chan, as well as payments made by one of these two companies on behalf of the other.
Timor Global made transfers to TL and also paid the latter’s business expenses on its behalf. These occurred without commercial benefit to Timor Global, said Fulcrum Distressed Partners.
Timor Global was placed into compulsory liquidation in 2018, and Chan was then one of its two directors and its sole shareholder. Meanwhile, she held a 70 per cent stake in TL.
Chan had breached her fiduciary duties as a director of Timor Global in approving the transfers and payments to TL with little or no benefit to Timor Global.
She did nothing to recover the loans even as the company became insolvent, Fulcrum Distressed Partners argued through lawyers from Rajah & Tann.
The other debt of S$3.2 million was the sales proceeds from coffee beans sold by Timor Global in 2008, which were transferred directly by its end-buyers to TL.
Fulcrum Distressed Partners said that the diversion was within Chan’s knowledge and constituted a breach of her fiduciary duty to Timor Global, as the sales proceeds should have been paid to the company.
A claim for breach of fiduciary duty is a provable debt in bankruptcy as an unliquidated (the amount owed is unclear or in dispute) claim arising from breach of trust.
Meanwhile, Justice Aidan Xu dismissed Chan’s application to set aside the S$4.3 million in claims from SME Care that the private trustee has accepted as valid.
SME Care was represented by Muralli Rajaram of Sreenivasan Chambers.
Chan also failed in her challenge of the validity of two other sums amounting to S$2.6 million being claimed by Fulcrum Distressed Partners.
Source: The Business Times © SPH Media Limited. Permission required for reproduction.
14447