It’s an open secret that the commendable goals envisaged by the legislature with the introduction of the business rescue proceedings in Chapter 6 of our Companies Act are being hampered as a result of poorly drafted statutory provisions that govern the business rescue process. Section 141(2)(a)(ii) is however not one of these vague provisions. In Western Crown Properties 61 (Pty) Ltd vs Able Walling Solutions (Pty) Ltd & Others/ 8073/16, the Western Cape High Court considered this provision and whether a business rescue practitioner can merely file a notice for the termination of the business rescue proceedings without applying to court to liquidate the company. Continue Reading Taking the easy way out of business rescue proceedings
This article first appeared in Without Prejudice in August 2017
What can the UK and South Africa learn from each other by comparing the business rescue regime with administration?
South Africa’s relatively recent business rescue regime (introduced in 2011) has exploded into a popular process for “affected persons” facing a company in financial distress. It shares some aspects with the administration procedure in England and Wales (UK). Lessons can be drawn from both the similarities and the differences between the two procedures that may benefit restructuring and insolvency practitioners both in the UK and South Africa. Continue reading.
There has been considerable controversy about the extent of the powers, and the extent of obligations of a business rescue practitioner in relation to a cession of book debts by the company in rescue. This is an important issue in business rescue because most financially distressed companies have an overdraft facility with a bank which is secured by a cession of debtors. Many practitioners want or need to use the overdraft facility as working capital. Continue reading