Singapore Opens Door for Bondholders to Chase Default Losses (1)

Singapore is giving liquidators of insolvent companies a new tool to retrieve funds for bondholders and other creditors.

Court-appointed managers will now be able to seek funding from investors unrelated to the case to pay the cost of pursuing claims, in exchange for part of the proceeds. That change came under the Insolvency, Restructuring and Dissolution Act, which was passed by lawmakers on Oct. 1.

Singapore’s corporate debt market has been shaken in recent years by more than S$1.5 billion ($1.09 billion) of defaults as oilfield contractors and shipbuilders stumbled. Many bondholders in these cases are individuals who lack ...