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Business Rescue: Essential Information for Shareholders

The Companies Act recognizes shareholders as key participants in Business Rescue proceedings, granting them the locus standi to initiate such proceedings under section 131. This recognition ensures that shareholders can actively engage in and influence the rescue...

Why Concurrent Creditors Must Support Business Rescue

In many cases, concurrent creditors do not receive any dividend payments when a company is liquidated. This outcome is due to the ranking order of creditors, which influences the distribution of dividends. Creditors are classified into two categories: secured and...

Surety’s Rights in Business Rescue

It is customary for credit providers to require security before extending credit, with security typically categorized as either real or personal. This article focuses solely on personal security. A creditor holding personal security is entitled to seek recourse from a...

The inappropriate vote in business rescue proceedings

In terms of section 152 of the Companies Act a proposed Business Rescue Plan must be approved by more than 75% of its creditors. Should a plan be rejected due to a creditor who is unreasonable, the practitioner may apply to court to set aside the vote on the grounds...

Business Rescue and sureties

It is trite in the business world that directors, or any other person normally conclude a suretyship agreement with a creditor on behalf of a company. A question then arises as to what is the position of a surety for a company in business rescue (BR)? Does the surety...

Covid-19 & SMMEs

The notorious coronavirus, also known as COVID-19 is causing a slowdown in trade, not only in South Africa but worldwide. In the past weeks, we have seen a lock-down of countries such as China and Italy. South Africa is no exception, on the 23rd of March 2020, the...