{"id":54,"date":"2020-06-16T17:32:47","date_gmt":"2020-06-16T17:32:47","guid":{"rendered":"http:\/\/www.elliottattorneys.co.za\/news\/?p=54"},"modified":"2022-06-14T16:47:29","modified_gmt":"2022-06-14T16:47:29","slug":"business-rescue-proceedings","status":"publish","type":"post","link":"https:\/\/www.elliottattorneys.co.za\/news\/business-rescue-proceedings\/","title":{"rendered":"BUSINESS RESCUE PROCEEDINGS"},"content":{"rendered":"

BUSINESS RESCUE PROCEEDINGS<\/p>\n

During this Covid-19 pandemic, there has been a lot of talk in the media
\ndealing with companies undergoing business rescue proceedings.<\/p>\n

The automatic assumption is that the company is no longer viable and will
\nsubsequently not be a going concern, this is, however, not always the case.<\/p>\n

The question therefore is: What is Business Rescue and what does it entail?<\/p>\n

In essence, business rescue is a procedure aimed to facilitate the
\nrehabilitation of a financially distressed entity. A business rescue
\npractitioner is appointed who then develops a business rescue plan, to
\nrescue the company, by restructuring its affairs. This may include a
\nrestructure of the business, its property, debt, other affairs, liabilities
\nand equity.<\/p>\n

A business therefore enters into business rescue when its in financial
\ndistress. In terms of the Companies Act it defines \u201cfinancial distress\u201d as
\neither when it is reasonably unlikely that a company will be able to pay
\nits debts when they fall due for payment in the immediately ensuing six
\nmonths, or when it is likely that the company will become insolvent in the
\nimmediately ensuing six months.<\/p>\n

A business rescue practitioner is a person appointed, or two or more
\npersons jointly appointed, to oversee a company during business rescue. The
\nappointment of a business rescue practitioner is done in accordance with
\ns129 of the Companies Act.<\/p>\n

S140 of the Companies Act lists the duties of the practitioner, which
\ninclude, but are not limited to, the following:<\/p>\n

    \n
  1. has full management control of the company in substitution for its
    \nboard and pre-existing management;<\/li>\n
  2. may delegate any power or function of the practitioner to a person who
    \nwas part of the board or pre-existing management of the company;<\/li>\n
  3. may\u2014<\/li>\n<\/ol>\n
      \n
    1. remove from office any person who forms part of the pre-existing
      \nmanagement of the company; or<\/li>\n
    2. Appoint a person as part of the management of a company, whether to \ufb01ll
      \na vacancy or not, subject to subsection (2); and<\/li>\n<\/ol>\n
        \n
      1. Is responsible to\u2014<\/li>\n<\/ol>\n
          \n
        1. develop a business rescue plan to be considered by affected persons, in
          \naccordance with Part D of this Chapter; and<\/li>\n
        2. Implement any business rescue plan that has been adopted in accordance
          \nwith Part D of this Chapter.<\/li>\n<\/ol>\n

          There are 2 ways a company can be placed in business rescue, namely:<\/p>\n

            \n
          1. when the board of directors of a company resolves that the company
            \nvoluntarily<\/li>\n<\/ol>\n

            commence business rescue proceedings and be placed under the supervision of
            \na business rescue practitioner; OR<\/p>\n

              \n
            1. when an affected person makes a formal application to court for an
              \norder placing the company under supervision and commencing business
              \nrescue proceedings. This application must be done if the company has
              \nnot commenced with business rescue proceedings. The aforesaid affected
              \nparty in its application needs to state the following:<\/li>\n<\/ol>\n
                \n
              1. the company is financially distressed;<\/li>\n
              2. the company has failed to pay over any amount in terms of an obligation
                \nunder or in terms of a public regulation, or contract, with respect to
                \nemployment related matters; or<\/li>\n
              3. it is otherwise just an equitable to do so for financial reasons, and
                \nthere is a reasonable prospect of rescuing the company.<\/li>\n<\/ol>\n

                As business rescue proceedings are complicated in nature, the decision
                \nshould not be undertaken without sound advice.<\/p>\n

                Our office will provide the requisite advice \u2013 feel free to contact us to
                \ndiscuss the process.<\/p>\n

                CLICK TO BOOK A CONSULTATION<\/span><\/a><\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

                BUSINESS RESCUE PROCEEDINGS During this Covid-19 pandemic, there has been a lot of talk in the media dealing with companies undergoing business rescue proceedings. The automatic assumption is that the company is no longer viable and will subsequently not be a going concern, this is, however, not always the case. […]<\/p>\n","protected":false},"author":1,"featured_media":56,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-54","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/posts\/54"}],"collection":[{"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/comments?post=54"}],"version-history":[{"count":7,"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/posts\/54\/revisions"}],"predecessor-version":[{"id":207,"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/posts\/54\/revisions\/207"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/media\/56"}],"wp:attachment":[{"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/media?parent=54"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/categories?post=54"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.elliottattorneys.co.za\/news\/wp-json\/wp\/v2\/tags?post=54"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}