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Innovative business rescue solutions before it's too late

WHAT IS BUSINESS RESCUE?

Business Rescue means proceedings to facilitate the rehabilitation of a company that is financially distressed by providing for

  1. the temporary supervision of the Company, and of the management of its affairs, business and property;
  2. a temporary moratorium on the rights of claimants against the Company or in respect of property in its possession and
  3. the development and implementation, if approved, of a plan to rescue the Company by restructuring its affairs, business, property, debt and other liabilities, and equity in a manner that maximizes the likelihood of the Company continuing inexistence on a solvent basis or, if that is not possible;
  4. a plan that would achieve a better return for the Company’s creditors than the payment they would have received if the Company had simply been liquidated immediately.

WHAT IS A BUSINESS RESCUE PRACTITIONER?

A Business Rescue Practitioner is a person appointed, or two or more persons appointed jointly, to oversee a Company during business rescue proceedings and a ‘practitioner’ has a corresponding meaning.


WHAT IS A BUSINESS RESCUE PLAN?

A Business Rescue Plan is a plan developed and, if approved, implemented by the Business Rescue Practitioner, which details the manner in which the practitioner envisages that the Company will be rescued.


WHEN DOES BUSINESS RESCUE START?

In terms of Section 132 of the new Companies Act, Business rescue proceedings begin when—

  1. the company—
    1. files a resolution to place itself under supervision in terms of section 129(3); or
    2. applies to the court for consent to file a resolution in terms of section 129(5)(b);
  2. an affected person applies to the court for an order placing the company under supervision in terms of section 131(1); or
  3. a court makes an order placing a company under supervision during the course of liquidation proceedings, or proceedings to enforce a security interest, as contemplated in section 131(7).