BEST DIGITAL NEWS START-UP, WAN-IFRA 2019 GOLD AWARD

honestbee creditor Benjamin Lim applies to wind up company

honestbee creditor Benjamin Lim applies to wind up company

2 -min read
Listen to this article
2 -min read
Listen to this article

A CREDITOR of honestbee, Benjamin Lim Jia-Rong, has filed a court application to wind up the distressed startup, according to a notice filed on the Government Gazette.

The application will be heard by the High Court on April 17.

The Business Times (BT) understands that honestbee owes Mr Lim US$3.8 million, which he had previously extended to the startup via an unsecured loan. This makes him junior to honestbee's sole secured creditor, Formation Group, which has all-monies charges for US$4 million in debt.

In addition, honestbee's current and former employees who are still owed salaries and CPF contributions will likely be paid ahead of creditors in a liquidation scenario. The startup's total debt pile stands at about US$230 million.

In August last year, Mr Lim filed a lawsuit against former honestbee chief executive Joel Sng seeking to recover the sum, but BT understands that the matter has since been resolved. Subsequently, Mr Lim filed affidavits opposing honestbee's restructuring bid. 

According to a BT report on March 26, honestbee lost court protection from creditors after the court dismissed its bid to convene a scheme meeting to restructure its debt. 

Under honestbee's proposed scheme of arrangement, FLK - an entity controlled by Formation's managing partner Brian Koo - was to have injected US$7 million into the company. The cash was to have been used to repay creditors owed above S$500 each with three cents on the dollar in cash. honestbee was to have repaid the remainder of its debt via equity issuance.

FLK and Formation later told honestbee that they were reconsidering their continued support for the company due to "the worsening Covid-19 pandemic across the world and the resulting uncertainties".

BT has reached out to honestbee for comment on the latest development.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes