The notion of the moratorium on legal proceedings against a financially distressed company undergoing business rescue is internationally recognized as a legal intervention necessary for allowing a breathing space for a company to be rescued. In South Africa, section 133 of the 2008 Companies Act makes provision for moratorium and details its main objectives in as far as business rescue is concerned. The main objective of the moratorium is to give effect to the purposes of the Act as enshrined in section 7 of the 2008 Companies Act. In particular, the moratorium is imposed to provide the company the required opportunity to breathe or the necessary period of respite in order to reorganise its affairs in a way as would allow it to operate on profitable basis without the unnecessary disruptions arising from the enforcement of the creditors’ claims and legal action taken against it whilst trying to reorganise its affairs. While this purpose is obviously a reasonable one, the rights of third parties to enforce their rights in a form of enforcement actions and legal proceedings against the subject company are seriously affected by moratorium. This dissertation aims at discussing and analysing the provisions in the Act relating to moratorium; to discuss and evaluate the impact that moratorium as provided for in section 133 of the Companies Act of 2008 has on the interests of creditors; as well as to compare the South African company law position in r the moratorium with that of Australian company law. / Mini Dissertation (LLM (Corporate Law))--University of Pretoria, 2020. / Mercantile Law / LLM (Corporate Law) / Unrestricted

Thesis (M.M. (Finance & Investment))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Graduate School of Business Administration, 2013. / South Africa has recently introduced into law a new Companies Act that has, amongst other changes, a segment dubbed „Chapter 6‟, which specifically focuses on distressed companies and their rescue/resolution. While past Acts in South Africa have had sections on distressed companies, none has positioned financial distress resolution as prominently within the Act as Chapter 6 has done. This hitherto lack of formalized focus of on business rescue in past Acts, made informal loan workouts the de facto mainstay for distressed business resolution in South Africa. It is therefore considered worthwhile that an investigation be undertaken to ascertain whether or not the newly legislated formal processes for rescuing distressed businesses will change the culture and/or overall view on the effectiveness of rescuing distressed businesses in South Africa. An online questionnaire of 17 questions sent to 5 different occupation categories generated 61 responses, which were around four coherent themes. From the analysis of the responses it was found that the inclusion of Chapter 6 (formalized business rescue legislation) in the new Companies Act was a welcome legislation with clear value-additions to company law in South Africa. The results also indicated that there is a level of uncertainty with regard to this legislation; thus, suggesting it is likely that informal loan workouts will remain a real option for some businesses in distress.

No abstract available Copyright / Dissertation (LLM)--University of Pretoria, 2012. / Mercantile Law / unrestricted

Business rescue is still in its infancy stage in South Africa, with the introduction of Chapter 6 of the Companies Act 71 in 2008 that took effect in mid-2011. To date the success rate has been dismal and value has been eroded as many companies opt to file for business rescue, but shouldn’t. The objective of this research is to determine glaring attributes that would require extensive consideration before filing for business rescue. These facets should be considered in the pre-assessment stage and should be given the due respect to ensure the organisation has a fighting chance at survival. Business rescue is becoming a tarnished industry within South Africa as a few business rescue practitioners are enriching themselves at the expense of the unexperienced creditors to this new piece of legislation that is designed to help facilitate a turnaround, whilst under the protection of the legal system. This in turn, will help to preserve, not only ailing businesses and their communal value, but the mere jobs of each individual within these distressed ventures. South Africa has struggled from a growth perspective for the past few years and with the help of legislation, and a thorough pre-assessment, ailing and distressed businesses may be saved. / Dissertation (MBA)--University of Pretoria, 2014. / zkgibs2015 / Gordon Institute of Business Science (GIBS) / Unrestricted

Mercantile Law / Mini Dissertation (LLM)--University of Pretoria, 2019. / Mercantile Law / LLM / Unrestricted

Orientation: As required by various sections in The Companies Act 71 of 2008, the appointed practitioner in a rescue must place before the court facts proving reasonable prospect; this is mainly determined through the subjective thought process of the practitioners who rely on his/her experience and knowledge in rescue and/or business management. This appears in direct contrast to the requirements set out by several court cases. There are many questions surrounding the determination of reasonable prospect as there is no benchmark for business rescue practitioners to work towards or a prescribed process to be followed. Research purpose: This article investigates different methods available to business rescue practitioners to factually determine (initial) reasonable prospect and guide the decision making process during the initial stages of the rescue. Motivation for the study: Business rescue is still in its infancy and reasonable prospect is one of the many vague but yet mandatory for initiating business rescue procedures. A better understanding of reasonable prospect and possible ways to factually measure it will contribute greatly to the business rescue regime. Research design and approach: The research studied numerous methods of determining financial distress and decline (literature) as well as relevant cases (law) of rescue accepted or declined in court, on the basis of reasonable prospect. Triangulation of findings assisted to conclude on a series of possible tools to be utilised during the business rescue process. Main findings: Reasonable prospect is mainly based on the practitioner's experience and opinion. Factually proving reasonable prospect remains difficult due to the presence of information asymmetry and the liability of data integrity. Due diligence is important and academic methods of determining financial distress/decline/position mostly serve as a communication tool to creditors. Practical/managerial implications: Business rescue practitioners and other affected parties could benefit from the insights obtained through this study. Confirming possible methods that could assist with the factual determination of (initial) reasonable prospect can contribute to business rescue education/ development as well as avoid the current conflict that surround the subject. Practical benefits for affected parties that must use reasonable prospect are also proposed. Contribution/value add: Identifying relevant methods of determining (initial) reasonable prospect may contribute to the better understanding of business rescue and possibly help future education of BRP's. / Dissertation (MCom)--University of Pretoria, 2016. / tm2016 / Business Management / MCom / Unrestricted

Background: A business rescue plan has to comply with a new and vague set of obligations regulated by South African legislation. Expectations of the plan are largely unknown, yet crucial in determining compliance. Establishing an effective benchmark for the plan is essential for the growth and success of the industry. Purpose: The study set out to answer these questions: What are the most crucial elements needed to fill the gap between the specifics of the Companies Act (2008) and the further elements needed to meet the plan’s primary objective of providing adequate information to stakeholders? What are the international principles applicable to rehabilitation plans and what elements underpin them? Method: Thirteen industry experts were selected and interviewed to identify the most crucial elements of the business rescue plan. Sampling was a combination of convenience and purposive sampling. Data collection obtained data on subjects’ opinions, rankings, agreement and ratings. Results: The study was able to confirm that there is indeed a gap between the mandatory elements prescribed in section 150(2) and the provision of sufficient information required by section 150(1) of the Companies Act No. 71 of 2008. The survey revealed that in the subjects’ expert opinion, the international principles are applicable to the business rescue plan. Conclusion: The crucial elements of the rehabilitation plan selected by the experts offer insight and clarity in terms of what is expected of the plan. / Dissertation (MCom)--University of Pretoria, 2014 / gm2015 / Business Management / MCom / Unrestricted

Thesis (M. Law. (Development and Management)) --University of Limpopo, 2016 / One of the fundamental objectives of the new Companies Act 71 of 2008 is to provide for efficient rescue of financially distressed companies. It is almost four years since the Act introduced the regime of business rescue, therefor details about its success or lack thereof must be examined so as to consider its viability in South Africa. With a very higher degree of certainty, the regime has so far shown some inherent shortcomings embodied in its application. Business rescue has had implications on corporate governance and taxation in South Africa. Against this new corporate scene, mini-dissertation analyses the most controversial aspects and the most telling implications of the business rescue regime since its inception in South African company law. Furthermore, this minidissertation analyses the call for further modification of the business rescue regime. Most importantly it spells out several recommendations which if considered pragmatically will constructively contribute to the viability of the business rescue regime in South Africa. It finds that the business rescue regime in South Africa is almost likely to be viable. KEY WORDS: business rescue, financially distressed and affected persons.

This dissertation critically analyses the business rescue regime, with a specific focus on those attributes of the regime which detrimentally affect creditors. The main aspects which will be critically analysed include, the moratorium, the effect of business rescue on suretyships and the costs of business rescue. Examples will be used to illustrate the ways in which the business rescue regime is disproportionately slanted in favour of debtor companies as opposed to their creditors. Proposals as to how the regime can be developed to balance the competing interests of debtor companies and their creditors will also be made. / Mini Dissertation (LLM (Corporate Law))--University of Pretoria, 2020. / Mercantile Law / LLM (Corporate Law) / Unrestricted

Controlling shareholders of private firms may define "value of the firm" in terms of personal utility. They may thus prioritize their personal wealth over the firm. Furthermore, agency-based corporate governance may not apply to privately owned firms. This study looked at managers and owners of private firms as potentially risky decision makers. Financial distress was positioned as a boundary to agency theory-based corporate governance for private firms. Choices of shareholders in respect of board composition and the relationship between board composition and external sources of funding were investigated. Influence on turnaround potential, of management who are also shareholders, was also considered. Data from 104 business rescue plans were used for correlation and multiple hierarchical regression analyses. The mean return to secured creditors was 94 % and the mean return to unsecured creditors was 48 %. Unexpectedly a negative correlation between number of directors and free assets was determined. Yet, in the regression model for return to secured creditors, the significant variables were total directors and free assets. It is concluded that personal surety provided by directors may be detrimental to a private firm's free assets. For unsecured creditors, the significant variables were size; management shareholding, and return to secured creditors. The study was conducted between 2011 and 2016 using secondary data drawn from actual business rescue cases. In conclusion, the agency cost of debt construct was refined and an estimate for the agency cost of distressed debt, was presented. Research findings offer improved insight into agency theory for private firms with a foundation for improved corporate governance models. Theorists may use this research to extend understanding of the theory of the firm and corporate governance. Furthermore bankruptcy and turnaround theory may be enhanced by the findings of this research. Practitioners may use the findings to refine credit risk and pricing models. / Thesis (PhD)--University of Pretoria, 2017. / Business Management / PhD / Unrestricted