An application for business rescue does not terminate the office of provisional liquidators nor does it result in the assets and management of the company in liquidation re-vesting in the directors of the company.
Where a company had been liquidated, an application was made for business rescue in GCC Engineering v Lawrence Maroos. Although section 131(6) of the Companies Act says that a business rescue application suspends liquidation proceedings, it suspends the process of winding-up and not the legal consequences of a winding-up order. A provisional liquidator cannot continue to take steps to bring about dissolution of the company but remains the provisional liquidator and the assets and control of the company remain in existence in terms of the liquidation order.
Upon a compulsory winding-up of a company the directors cease to function as directors. They are deprived of their control on behalf of the company of the property of the company which is deemed to be in the custody or control of the Master or liquidator and a business rescue application does not change that position.