On 31 October 2012 an important decision on the ranking of creditors’ votes on a business rescue plan was handed down in the Western Cape High Court. This was in the matter of Commissioner: Sars v Mark Beginsel NO and Others. In terms of Section 99 of the Insolvency Act, No 24 of 1936 (“the…
In most instances a company in business rescue will require post commencement financing. A potential investor or post commencement financier may come along with an offer to invest in the company and in return, subscribing for all the authorised but unissued ordinary shares in the company. The question arises as to whether the business rescue practitioner:…
S 129 and 130 Company resolution to begin BRP: If a company is financially distressed and there appears to be a reasonable prospect of rescuing the company, the board may pass a resolution to voluntarily begin BRP and appoint a practitioner. Notice of such a resolution and appointment must be sent to all affected…
Post-commencement financing (i.e. will there be a willingness on the part of banks and financial institutions to provide post-commencement finance during BRP? If so, will a company under supervision have the requisite assets to provide security for continued funding? Many of the company’s assets might already be encumbered at the time proceedings commence); The…
Chapter 6 of the Companies Act 71 of 2008 (“the Act”) is silent in relation to amendments of a business rescue plan after it has already been approved. The Act further does not empower the Business Rescue Practitioner to deal with nor does it set out the manner in which potential disputes, which may arise…