In Malaysia, can I stop a creditor from winding up [company removed] by proposing a scheme of arrangement?

Dear Sir/Madam,

Thank you for reaching out to Kevin Wu Associates.

We note the urgency of your position. A statutory demand served by a creditor is a formal precursor to winding-up proceedings under the Companies Act 2016, and once a petition is filed, your company's options narrow considerably. Time is therefore a critical factor.

On the question of a scheme of arrangement under section 366 of the Companies Act 2016, it is available as a restructuring mechanism and, if properly constituted, may be accompanied by an application for a restraining order under section 368 to prevent or stay winding-up proceedings while the scheme is being proposed and voted upon. However, securing such relief requires the court to be satisfied that a credible scheme is genuinely in contemplation — it is not available as a delaying tactic.

The immediate steps we would advise are as follows. First, we would need to conduct a preliminary assessment of your company's financial position, creditor profile, and the terms of the statutory demand. Second, if a scheme is viable, we would move to prepare the necessary cause papers for a section 368 restraining order application on an urgent basis. Third, we would engage your supplier and other key creditors at the earliest opportunity to manage the threat of a petition being presented.

To advise you properly, we would require a consultation at the earliest opportunity. We would ask that you come prepared with your company's latest management accounts, a creditor list with outstanding amounts, and a copy of the statutory demand.

Please contact our office at your earliest convenience to arrange a consultation. Given the timelines involved, we would recommend doing so within the next 24 to 48 hours.