Business Rescue

Hold back creditors and rescue your business

Business Rescue

Hold back creditors and rescue your business

Business Rescue
definition

Business Rescue aims to do exactly what the name says; to rescue or rehabilitate a Company which is under financial duress. A rescue plan must be drawn up by the Business Rescue Practitioner (in consultation with certain parties), which must be implemented in an attempt to save the Company.

BUSINESS RESCUE DEFINITION

Business Rescue aims to do exactly what the name says; to rescue or rehabilitate a Company which is under financial duress. A rescue plan must be drawn up by the Business Rescue Practitioner (in consultation with certain parties), which must be implemented in an attempt to save the Company.

The Choice you have under the New Companies Act!

If the board of directors of a company has reasonable grounds to believe that the company is financially distressed, they must either;

Put the company under business rescue, or;
Deliver a written notice to all shareholders, creditors, employees and trade unions, that the company is financially distressed, and give reasons why the company is not put under Rescue

Who can Apply

N

Directors

N

Shareholders

N

Employees

N

Trade Unions on behalf of their members

Resue Order Granted

N

There is it that the company is financially distressed

N

There reasonable prospects of saving the company

N

Procedural requirements were not complied with

N

If the court deems it “Just and Equitable” that the order be granted.

BUSINESS RESCUE Process

During the Rescue Proceedings, there is a general moratorium on legal proceedings against the company. Because this moratorium might prejudice the companies, legal opponents, the prescribed time periods allowed in the process, are also suspended for the same period that the matter was postponed by the moratorium. There are a few exceptions, however.

BUSINESS RESCUE Process

During the Rescue Proceedings, there is a general moratorium on legal proceedings against the company. Because this moratorium might prejudice the companies, legal opponents, the prescribed time periods allowed in the process, are also suspended for the same period that the matter was postponed by the moratorium. There are a few exceptions, however.

Legal Proceedings may commence when

N

If written consent is given by the BRP;

N

As a set-off in legal proceedings by the company

N

When the court has so ordered;

N

Proceedings of any property or right which the company holds as trustee

N

Criminal proceedings against the company, its directors or officers are unaffected

N

A guarantee or surety by the company is unenforced without leave from the court

Frequently asked questions

Get immediate answers to your questions

questions

Frequently asked questions

questions

Get immediate answers to your questions

Business Rescue FREQUENTLY ASKED QUESTIONS

Can an application For Business Rescue be made after legal proceedings for the liquidation of the company has started?

Yes – irrespective if to Application was made by or against the Company. The application for Business rescue suspends the Liquidation Application until the court gave a discussion. Should the Rescue Order be granted then the application for liquidation cannot go ahead. Should the order not be granted, the liquidation application goes ahead.

What is the Purpose of The Business Rescue Procedure?

Business Rescue aims to do exactly what the name says; to rescue or rehabilitate a Company which is under financial duress. A rescue plan must be drawn up by the Business Rescue Practitioner (in consultation with certain parties), which must be implemented in an attempt to save the Company.

What form does the Business Rescue Plan take?

Can take many forms, which might include a total or partial restructuring of the companies’ affairs, property, business, shares & shareholding, Debt, operation, and equity, to make the company commercially viable, and to try and create a better result for the creditors and shareholders than an immediate liquidation would bring.

Who May apply to court for a Business Rescue Order?

Directors
Shareholders
Employees
Trade Unions on behalf of their members

My Company is currently under Judicial Jud Management, can I still place it under Business Rescue?

Yes

Who is qualified to be appointed as a Business Rescue Practitioner?

[Sec 138(1)(e)]

The Act introduces a concept of a “professional business practitioner”. He must be:

In good standing with a regulated profession. (We will later find out what exactly this means)
Trusted;
Not disqualified to be a director of a company;
Not bee placed under probation;
He must not be “related” to the company. (Such as xx xx xx)

The Act furthermore (s138(2) stipulated that the minister may (to regulate Business Rescue Practice) designate certain persons or associations as Business Rescue Practitioners if that person or association:

Is committed to achieving Rescues of Companies in accordance with the Act;
Functions predominantly to promote sound principles and good practice of business turnaround and rescue; and,
Have sufficient human-, financial- and operational resources and adequate administrative procedures and safeguards, to enable it to function efficiently and effectively to carry out its in terms of chapter 9 of the Act, (which deals with Business Rescues).