The sudden closure of The Projector earlier this week took many by surprise. The beloved independent cinema and arts venue announced at the start of August that they would be ceasing their operations at Cineleisure and “coming home” to Golden Mile Tower. However, just two weeks later, on 19th August, it announced that it would enter voluntary liquidation and cease all operations immediately.
This meant that movie screenings and events at The Projector that had already been announced would be cancelled. Projector memberships would end as of 19th August, and about 2,300 members would be affected, along with the hundreds of ticket holders.
Because the company had filed for voluntary liquidation, they were unable to issue refunds directly to members and ticket holders.
It was later reported that the company behind the Projector, Pocket Cinema, owed more than $1.2 million to creditors, including banks, the Projector’s co-founders, members and ticket holders.
Why Companies Choose Voluntary Liquidation
Voluntary liquidation implies that it is the company itself that chooses to close, and it is not due to to legal reasons or via the application of a creditor. There are many reasons why a company would want to wind up its business.
For example, it may wish to minimise tax liabilities, it may decide that continued operations are unfeasible or impractical, or that it doesn’t wish to incur ongoing compliance and maintenance costs.
There are two types of voluntary liquidation: Members’ voluntary liquidation and creditors’ voluntary liquidation.
Members’ Voluntary Liquidation
This means that shareholders of a solvent company decide to discontinue the business, assent to a resolution to wind up the company voluntarily, and appoint a liquidator to take over the company’s affairs. This includes realising the assets (i.e. selling them off), setlling liabilities, and returning any surplus assets to the shareholders.
Note that this option is only possible if the company is solvent. That means it believes that its current assets exceed its current liabilities such that it is able to meet all debts within a 12-month timeframe.
Creditors’ Voluntary Liquidation
If the company is not able to meet its liabilities, the company can convene a meeting with its creditors to consider its proposal for a voluntary winding up of the company.
If a resolution is passed in favour of the winding up, the company will appoint a liquidator, subject to any preference the creditors may have as to the choice of liquidator.
Despite the name, creditors’ voluntary liquidation is not intiated by the creditors themselves. It simply implies that the company may not be solvent, and therefore a creditors meeting must be held, since not every creditor may be able to receive the amount due to them.
The Projector is not the first and will not be the last company to choose voluntary liquidation. In recent years, especially during the COVID-19 pandemic, there have been a number of companies in Singapore that filed for voluntary liquidation, including UCars, China Club, EVCo, and Archwey. However, two company names that might be more familiar to Singaporeans are Reebonz and Hooq Digital.
Reebonz
Luxury marketplace Reebonz filed for voluntary liquidation in 2021. The company was founded in 2009 and was once considered the largest online luxury sales company in Southeast Asia, with membership growing to a peak of 4.5 million in 2015.
In the two years before their liquidation, however, there had been complaints from both buyers and sellers on the marketplace. Buyers said that the pre-owned luxury bags and jewellery they purchased from the platform were not authentic, while others complained that the items they received were of poor quality. Several sellers also complained of not receiving payment from the service after selling their pre-owned bags on the platform.
Reebonz went under with total liabilities reportedly estimated to be $65 million. The bulk of this amount was to financial institutions. It also included some $79,000 owed to individual sellers on the platform.
In 2021, LiveCommerce Entertainment was formed to acquire all the brand and digital assets of Reebonz, relaunching it as ReebonzLIVE.
In August 2023, the Reebonz headquarters building in Tampines North was sold for a reported $39 million, having been put on the market approximately 1.5 years earlier.
Hooq Digital
In 2020, multi-territory streaming service Hooq Digital filed for creditors’ voluntary liquidation. Despite a strong start as a subscription-based video-on-demand streaming service in the region, it remained loss-making for its parent company.
Hooq cited the high “cost of content” as a reason for winding up. In contrast, “consumer’s willingness to pay” for such content was affected by the competitive content landscape, following the arrival of Netflix and Amazon Prime Video into Southeast Asia in late 2019.
By then, Singtel had an indirect 76.5% effective interest in the company, which was a joint venture with Sony Pictures Television and Warner Bros Entertainment.
According to ACRA filings, the five-year-old company went under with total liabilities of 70.8 million USD. This included unpaid fees owed to studios and producers, as well as intellectual property rights.
It was only on 31 May 2024 that the creditors’ voluntary liquidation process was completed, and SingTel announced on 3 June 2024 that Hooq Digital was “dissolved”.
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