If prospects of success of business rescue exist a court will allow business rescue to commence even if the company is in final liquidation.
In Richter v Absa Bank Limited, the Supreme Court of Appeal pointed out that business rescue protects interests of a wider group of people than liquidation and interpreted the Companies Act as elevating the role of companies as a means of achieving economic and social benefits. Therefore if in liquidation a company’s prospects improve and evidence becomes available that business rescue proceedings would yield a better return for shareholders and creditors and retain jobs there can be no reason to prevent business rescue even if the company is in final liquidation.
This means that in any liquidation proceeding there is a possibility of the proceedings being stopped by an application from affected persons applying for business rescue even after a final winding up order has been granted at any time up until the deregistration of a company.
