Business Rescue

Question 1

What is the Aim of business rescue

Answer 1

Business rescue is an evolution and advancement of the process that was previously known as judicial management under the old Companies Act of 1973. It is an attempt to rehabilitate companies on the verge of insolvency instead of the traditional approach of liquidating them.

Question 2

COURT ORDER TO BEGIN BUSINESS RESCUE PROCEEDINGS

Answer 2

A: Resolution

1. the company is financially distressed;
2. there appears to be a reasonable prospect of rescuing the company.

B: Court order

1. make an order placing the company under supervision and commencing business rescue proceedings, if the court is satisfied that:
   • the company is indeed financially distressed
   • the company has failed to pay over any amount in terms of an obligation or contract with respect to employment-related
   matter; or
   • it is otherwise just and equitable to do so for financial reasonsand there is a reasonable prospect for rescuing the company;
2. dismiss the application.

Question 3

cancellation of a business rescue order t

Answer 3

The cancellation of a business rescue order takes place by order of Court. This may take place on the application of the business rescue practitioner for the replacement of business rescue by a winding-up. In addition the Court, on the application of the business rescue practitioner or of any other person having an interest in the company, may cancel the order if it appears that the purpose of the order has been fulfilled or that it is undesirable for any reason for it to remain in force.

Question 4

duties of the provisional business rescue practitioner

Answer 4

• Assume the management and recover and reduce into possession all the assets of the company.
• Lodge with the Registrar within seven days of his appointment a copy of his letter of appointment.
• Prepare and lay his report before the meetings convened by the Master .