An Honestbee creditor, Mr Benjamin Lim Jia-Rong, has filed a court application to wind up the struggling start-up. A notice on the Government Gazette shows 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 (S$5.4 million), which he had extended to it via an unsecured loan. This makes him junior to the firm’s sole secured creditor, Formation Group, which has all-monies charges for US$4 million in debt.
Honestbee’s current and former workers who are still owed salaries and Central Provident Fund contributions will likely be paid ahead of creditors in a liquidation scenario.
The start-up’s total debt pile stands at about US$230 million.
Last August, 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.
A BT report on March 26 said Honestbee lost court protection from creditors after its bid to convene a scheme meeting to restructure its debt was dismissed by the court.
Under the proposed scheme of arrangement, FLK – an entity controlled by Formation managing partner Brian Koo – was to have injected US$7 million into the firm. The cash was to have been used to repay creditors owed above $500 each with three cents on the dollar in cash. Honestbee was to have repaid the remainder of its debt via equity issuance.
THE BUSINESS TIMES