Scenario 2 - Liquidation 

The Summary

Liquidation of insolvent companies often caused tensions between the company and the stakeholders including the business owner. 

The backdrop 

In this case, a businessman in the electronic component business established his transnational network of supplies from China, Singapore and further value-add processed in Malaysia before delivery through multi channel distributions to a major printer manufacturing plant in Malaysia.

The business went well for some years until certain batches of processed components were rejected due to quality issues and the manufacturing plant withheld payments pending urgent replacements to facilitate its production.

This caused the businessman severe cash flow problems, which were further aggravated by the company’s inability to collect debts of SGD500,00 while concurrently the Singapore supplier sued the company for payments of its parts.

The businessman attempted to salvage the situation by explaining his predicament to the Singapore supplier, but the supplier persisted his actions. The businessman after nearly exhausting his attempts with personal loans of more than SGD200,000 to try sustaining the operations eventually decided to wind up the company’s affairs. 

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