Judicial Management Changes 2026: What MinLaw’s May 2026 Decision Means for SME Owners and Creditors

Short answer: On 14 May 2026 the Ministry of Law broadly accepted a committee’s nine recommendations to reform Singapore’s restructuring regime, including rescue-only judicial management, success-linked fees for judicial managers and an easier cross-class cramdown. As at 24 October 2026 no amending bill has been introduced, so the current Part 7 IRDA rules still apply.

The judicial management changes 2026 business owners are hearing about come from a policy decision, not a new statute. Judicial management is the court-supervised process in which a licensed insolvency practitioner (the judicial manager) takes over a struggling company to try to rescue it. On 14 May 2026 the Ministry of Law (MinLaw) announced that it had broadly accepted the recommendations of the Committee to Enhance Singapore’s Corporate Restructuring and Insolvency Regime, whose report was published on 11 March 2025. This article separates what has been proposed from what is in force today, and explains what SME directors and creditors should do in the meantime. For the step-by-step process as it works now, read our guide to judicial management, the moratorium and the 180-day clock.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

What did the Ministry of Law announce on 14 May 2026?

MinLaw said it had reviewed and broadly accepted the Committee’s recommendations after assessing all consultation feedback, and that it will make “suitable refinements and adjustments” when implementing them. The release did not give a timetable or publish draft legislation.

The MinLaw press release of 14 May 2026 groups the recommendations into four categories:

1. Strengthening the judicial management regime.
2. Refining the cross-class cramdown in schemes of arrangement.
3. Refining the framework and tools for efficient debt restructurings.
4. Adopting the UNCITRAL Model Law on Enterprise Group Insolvency and the UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgments.

The Committee was co-chaired by a Supreme Court judge and the Permanent Secretary of MinLaw, and worked from October 2023 to October 2024. Besides the 10 written responses, MinLaw held focus group discussions with close to 30 stakeholders from the turnaround, restructuring, legal, accounting and banking sectors. The full reasoning is in the Committee’s report (PDF).

Are the judicial management changes in 2026 already law?

No. The May 2026 decision is a policy acceptance, and the changes need an amending Act. As at 24 October 2026 no such bill has been introduced in Parliament, MinLaw has issued no further release on it, and the version of the IRDA on Singapore Statutes Online, current as at 24 October 2026, still contains the existing Part 7 on judicial management and the existing section 70 cramdown test.

The table separates what is in force from what has been proposed.

The insolvency change that has commenced in 2026 is a separate one: the revamped Simplified Insolvency Programme (SIP 2.0) started on 29 January 2026 for companies whose liabilities do not exceed S$2 million. Our SIP 2.0 guide covers it.

How would judicial management itself change?

Judicial management would become a rescue-only tool. The Committee recommends retaining only the restructuring and turnaround functions, so creditors wanting a pure realisation of assets would use receivership or winding up instead.

The reasoning rests on a review of past cases. Between 23 May 2017 and 31 December 2021, 117 judicial management applications were made; of the 99 cases reviewed, slightly less than half (43) were treated as successful. Creditor applications were granted more often (80%) than company applications (54%), and most cases concluded around the one-year mark, with a median of 361 days for entry by creditors’ resolution and 379 days for entry by court application. The report also records the view that judicial management is often treated as a last resort.

The main judicial management proposals are:

• Rescue focus (Recommendation 1.1): judicial management keeps only its restructuring and turnaround functions.
• Standing (Recommendation 1.2): both creditors and the company may still apply.
• Remuneration (Recommendation 1.3): pay linked to successful outcomes, discussed below.
• Clawbacks (Recommendation 1.4): the judicial manager keeps the power to challenge prior transactions, which the Committee saw as a lever to win creditor support for a restructuring plan.
• Consequential changes: a benefit test at entry, a court-controlled power for judicial managers to make distributions in certain cases, and schemes of arrangement (including pre-packaged schemes under section 71 IRDA) as the way to implement a restructuring plan from within judicial management.

For directors, the practical point is that judicial management would become harder to use simply to “buy time”. The report says the benefit test is meant to deter that.

What is the proposed success fee for judicial managers?

The Committee proposes a multi-stage fee model. The judicial manager would be paid on a time-cost basis while getting up to speed on the case, and after that the pay would be linked to achieving the proposals, including a success fee.

The report suggests putting the fee terms into the statement of proposals under section 107 IRDA. Today that statement must go to the Registrar of Companies and every known creditor within 90 days of entry into judicial management, unless extended, and be laid before a creditors’ meeting called on not less than 14 days’ notice. Two limits matter for creditors:

• The Committee said it would not be commercially desirable to prescribe a specific figure, percentage or formula.
• The conditions of “success” must be agreed between the judicial manager and the creditors.

The Committee also rejected a proposal to bar a judicial manager from later becoming the company’s liquidator. Until the law changes, a judicial manager’s remuneration and expenses are paid out of company property in accordance with section 114 IRDA, and a former judicial manager whose fees were not approved by the court or the committee of creditors may apply to court under section 113.

What changes are proposed for cross-class cramdown?

The Committee recommends making cross-class cramdown easier by removing the overall majority test, and extending it to shareholders in appropriate circumstances. A cross-class cramdown lets the court approve a scheme of arrangement even though one class of creditors voted against it.

Under section 70(3) IRDA today, the court can only cram down a dissenting class if:

1. a majority in number of the creditors meant to be bound, present and voting, agreed to the scheme;
2. that majority represents three-fourths in value of those creditors; and
3. the scheme does not discriminate unfairly between classes and is fair and equitable to each dissenting class.

The Committee recommends removing conditions 1 and 2, which it called a high threshold that deters cramdown plans, while keeping the fairness safeguards. It said shareholders with no economic interest should not be able to “hold out”, but that they should be able to keep an interest if they contribute “new value”. Two linked proposals also matter for SMEs:

• Streamlining the general meeting approvals under sections 160 and 161 of the Companies Act 1967 for disposing of the whole or substantially the whole of the undertaking, or issuing new shares, in a judicial management or scheme.
• Giving the court discretion to appoint a neutral “Restructuring Officer” in a scheme of arrangement. The Committee did not recommend this for judicial management.

For how schemes and creditor classes work now, see our guide to the scheme of arrangement court process. On the cross-border side, Singapore would also adopt the two further UNCITRAL model laws, alongside the Model Law on Cross-Border Insolvency it adopted in 2017.

How will the reforms become law, and what should you watch for?

The recommendations need an amending bill to be introduced, passed by Parliament, assented to by the President and then brought into force. Until the commencement date, nothing changes for companies or creditors.

1. MinLaw prepares the amending legislation, applying the “refinements and adjustments” it has signalled.
2. The bill is introduced (first reading) and published on Parliament’s Bills Introduced page and in the Bills Supplement on Singapore Statutes Online.
3. Parliament debates and passes the bill at second and third reading.
4. The President assents and the bill becomes an Act.
5. The Act, or parts of it, commence on the date or dates fixed. Transitional rules will decide whether cases already running are affected.

Court procedure will also need updating. Today the procedure for a judicial management application sits in Part 4 (rules 47 to 62) of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020, and every court application is conducted by a Singapore Advocate and Solicitor.

What should SME owners and creditors do now?

Plan on the basis of the current IRDA, watch for the bill, and get your company records in order. Good records make every rescue option faster and cheaper, whatever the final legislation says.

The company secretary and corporate service provider (CSP) handle the records around a restructuring; the solicitor and insolvency practitioner run the court and creditor process.

Costs depend on the number of creditors, how contested the application is, the number of hearings and the judicial manager’s time. We do not quote ranges because they vary widely; ask any practitioner for a written fee basis before appointment.

What are the common mistakes to avoid?

The most common mistake is acting as if the reforms already apply. The others usually come from waiting too long or keeping poor records.

• Assuming success fees or the new cramdown threshold can be used today. They cannot until the IRDA is amended.
• Planning a pure asset sale through judicial management on the assumption it will stay available after reform.
• Seeking judicial management only to delay creditors. Today’s section 91 test and the proposed benefit test both look for a realistic rescue outcome.
• Nominating the company’s auditor as judicial manager. Section 91(3)(a) IRDA requires a licensed insolvency practitioner who is not the auditor.
• Letting registers and accounts fall behind, which slows the statement of affairs and the proposals.

Frequently asked questions

Has judicial management changed in Singapore in 2026?

Not in law. MinLaw accepted the recommendations on 14 May 2026, but as at 24 October 2026 no amending bill had been introduced. Judicial management still runs under Part 7 IRDA.

Will a judicial manager be paid only if the rescue succeeds?

No. The proposal is time costs for an initial period, then remuneration linked to achieving the proposals, with a success component. The terms of success would be agreed with creditors, not fixed by law.

Can a company still apply for its own judicial management?

Yes. Today the company, its directors or a creditor may apply under sections 90 and 91 IRDA, and the Committee recommended keeping both routes, with a benefit test over an immediate winding up.

Could shareholders be crammed down under the proposals?

Possibly, in appropriate circumstances, with shareholders able to keep an interest if they contribute new value. This is not in force.

When will the amending legislation come into force?

No date has been announced. Watch MinLaw press releases and Parliament’s Bills Introduced page.

Does this affect the Simplified Insolvency Programme?

No. SIP 2.0 commenced separately on 29 January 2026, and simplified insolvency processes were outside the Committee’s terms of reference.

Last reviewed: 24 October 2026. The Editorial Team, Raffles Corporate Services.