A failure to comply with the business rescue procedure timelines in Section 129(3) does not terminate the business rescue proceedings. Only a court can terminate those proceedings. This does not however mean that the time periods should be ignored. To avoid any court challenges the time periods stipulated must be complied with.
Business rescue is
In an important judgment delivered by the Supreme Court of Appeal on 20 May 2015 in African Banking Corporation of Botswana Ltd v Kariba Furniture Manufacturers (Pty) Ltd and others, the Supreme Court of Appeal held that a purportedly binding offer made to a creditor, who opposes a business rescue plan, is not automatically
The moratorium on legal proceedings against a company in business rescue offers critical breathing space to the company from its creditors, allowing the business rescue practitioner the opportunity to investigate affairs of the company and develop the business rescue plan for its restructure.
A recent case offers a useful interpretation of the extent and implications
Without deciding the point, the Supreme Court of Appeal in New Port Finance Company (Pty) Ltd v Nedbank Limited held that the decision in Tuning Fork (Pty) Limited v Greeff may not be correct in saying that where the principal debts are diminished or expunged by a business rescue plan the sureties are released accordingly.
The latest appeal court decision of New Port Finance Co v Nedbank reinforces our view that every suretyship securing a company’s debts should specifically preserve the creditor’s rights against a surety despite discharge of any part of the principal debt by a business rescue plan and that creditors should ensure that claims against sureties are
Every suretyship securing a company’s debts should specifically preserve the creditor’s rights to recover from the surety despite discharge of the principal debt in a business rescue plan. And every business rescue plan should, if possible, contain a provision preserving rights against sureties.
If a debtor company is in business rescue, its creditors may call
A court can issue an order placing a company in business rescue if it is shown that the company has reasonable prospects of being restored to a continued solvent existence or of achieving a better return for creditors and shareholders than would result from immediate liquidation. The supreme court of appeal made this finding in
The supreme court of appeal in Oakdene Square Properties v Farm Bothasfontein (Kyalami) gave some useful guidance about what should be in a business rescue application: