With the onset of globalisation and markets being exposed to the effects of global recessions and economic downturns, the fundamental principles on which business operates have changed substantially. Some businesses have thrived in this new context, whilst others have struggled to remain competitive as is evident by the increasing trend of corporate failures and the considerable increase in liquidations. As a result the concept of corporate renewal and business rescue has become an integral element of the strategy of organisations, particularly those that are financially distressed.South Africa responded through the introduction of the new South African Companies Act 71 of 2008, which came into effect in May 2011 and contained a new chapter called Chapter 6: Business rescue and Compromise with Creditors. However one of the critical components of the success of the business rescue, which has been largely unsuccessful to date, involves securing turnaround finance (post-commencement finance) to restore the company‘s financial health.The aim of this study was to find substantive evidence that the presence of post-commencement finance in South African companies does not exist, as opposed to the findings of international research, as well as the exploration and confirmation of factors that result in the successful raising of post-commencement financing.To this end, qualitative research with an exploratory design was conducted. Eighteen leading South African business rescue experts were interviewed to uncover their unique insights regarding this dilemma. The rich data that was unearthed was analysed using content and narrative analysis against the propositions derived from the literature. The empirical findings confirmed that the current level of PCF in South Africa is non-existent due to various reasons. A host of critical success factors and reasons for disinterest were identified which formed the basis of a framework informing the best practice guidelines when raising PCF. Some of these include many of unintended consequences of the newness of the Act, business rescue processes being left too late, the poor financial state of the business that eventually files for rescue and the significant impact on the outcome by some of the key players (e.g. the fiannciers and business rescue practitioners). These guidelines will solve the dilemma under review by benchmarking them to international best practice.Several important areas for future research emerged, alongside the recommendations of insights gained outlined for the various stakeholders. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

This study examined the new Companies Act (71/2008) with a specific focus on Chapter 6, business rescue. This rather controversial legislation was implemented in South African company law on the 1st of May 2011 and redefines how legislation can possibly save financially distressed companies from distress and ultimately liquidation proceedings. The literature review has focused on the purpose of business rescue as set out by the new Companies Act. It has gone into much detail on the set processes, revealed the key stakeholders involved and their respective responsibilities set out by the new Act. The study touched on current international trends in saving distressed businesses. A published financial distress model was discussed and a link made about where best to initiate business rescue actions within this four-stage model. In this study the empirical research adopts content analysis as a research method. An investigation was conducted on all business rescue applications received by the Companies and Intellectual Property Commission (CIPC). Additional analysis of a large creditor’s portfolio of business rescue applications showed some initial success rates of this new legislation. The mini-dissertation concludes with limitations and challenges faced during the study, followed by recommendations about how to excel in business rescue practice in years to come. / Thesis (MBA)--North-West University, Potchefstroom Campus, 2013.

This study examined the new Companies Act (71/2008) with a specific focus on Chapter 6, business rescue. This rather controversial legislation was implemented in South African company law on the 1st of May 2011 and redefines how legislation can possibly save financially distressed companies from distress and ultimately liquidation proceedings. The literature review has focused on the purpose of business rescue as set out by the new Companies Act. It has gone into much detail on the set processes, revealed the key stakeholders involved and their respective responsibilities set out by the new Act. The study touched on current international trends in saving distressed businesses. A published financial distress model was discussed and a link made about where best to initiate business rescue actions within this four-stage model. In this study the empirical research adopts content analysis as a research method. An investigation was conducted on all business rescue applications received by the Companies and Intellectual Property Commission (CIPC). Additional analysis of a large creditor’s portfolio of business rescue applications showed some initial success rates of this new legislation. The mini-dissertation concludes with limitations and challenges faced during the study, followed by recommendations about how to excel in business rescue practice in years to come. / Thesis (MBA)--North-West University, Potchefstroom Campus, 2013.

The journey towards insolvency is often a gradual process, thus enabling a business or person in most circumstances to be aware of the danger ahead if adequate precautions are not taken. This position is recognized by the Statute, hence the definition given to a financially distressed company under the Companies Act1 to mean inability to pay all its debts within the immediately ensuring six months or the likelihood of going insolvent within the immediately ensuring six months. Rescue mechanisms are therefore aimed at ensuring that when faced with the signs of insolvency, a business for instance can be properly driven to become solvent again or at least restructured to achieve better realization of assets.2 Indeed, providing alternatives to insolvency is fast becoming a global trend as many countries now appreciate the need to give a person or business experiencing difficult times, the opportunity to rise again without necessarily going through the rigors of liquidation or sequestration. South Africa is not left out in the quest to assist over-indebted persons and provide them with alternative measures beside insolvency. The National Credit Act3 for instance seeks as one of its objectives to prevent over-indebtedness and where it occurs address same by means of debt rearrangement. This is in addition to certain provisions of the Magistrate CourtP a g e Act4 which allow a debtor the option of applying for an administration order and where granted make payment in instalments. The Companies Act also provides for business rescue as well as compromise between company and creditors.5 This research in brief analyses the above mentioned laws in South Africa that provide alternative measures for financially troubled or over-indebted debtors as applicable to corporate and non-corporate entities. The research considers whether these laws are sufficient to assist debtors in financial crisis, the effectiveness of these laws, challenges as well as loopholes taking into consideration what is applicable in other jurisdictions such as the United States, United Kingdom, Canada and Australia. The end of this research contains recommendations that would assist in achieving effective rescue mechanisms or alternatives to insolvency beneficial to both corporate and noncorporate entities in South African. Copyright / Dissertation (LLM)--University of Pretoria, 2012. / Mercantile Law / unrestricted

LLM / Department of Mercantile Law / Business rescue provisions are meant to assist a financially distressed company. It seems that the success of business rescue rests on three factors, namely a competent business rescue practitioner and a practicable business rescue plan; the consent and cooperation of shareholders and creditors. However, academics and case law point out concerns as to the regulation of the aforementioned essential ingredients. The purpose of this study is to ascertain the level of the efficacy of the Companies Act provisions on business rescue as contained in Chapter 6. The researcher compares the current business rescue regime and the previous judicial management procedure to find out how the current regime can be improved. Since the business rescue regime was adopted from other jurisdictions the researcher also compares the practices in some of those jurisdictions with that of South Africa to establish the goals and expectations of business rescue in modern corporate operations. / NRF

South African company law has provided for the rescue of financially distressed companies since 1926 when the statutory procedure of judicial management was introduced by the Companies Act 46 of 1926. Unfortunately, judicial management has never been regarded as a successful corporate rescue procedure and for most of its existence it has been severely criticised on many grounds. The Companies Act 61 of 1973 that replaced the Companies Act 46 of 1926 did very little to improve this situation and judicial management remained underutilised. As a result, the Companies Act 71 of 2008 now introduces two newly-created corporate rescue procedures in the form of business rescue proceedings and the compromise with creditors. This study analyses judicial management and the new corporate rescue procedures to establish whether the identified weaknesses of judicial management have been adequately and effectively addressed in the new procedures. A comparative study with similar procedures in England and Germany is undertaken to determine whether the South African legislature has delivered on its promise to create a system of corporate rescue that will meet the needs of a modern South African economy. Several weaknesses in the new procedures are identified and a number of recommendations are made to improve the relevant provisions and to assist in providing South African company law with an efficient and acceptable corporate rescue regime. / Mercentile Law / LLD (Mercentile Law)

South African company law has provided for the rescue of financially distressed companies since 1926 when the statutory procedure of judicial management was introduced by the Companies Act 46 of 1926. Unfortunately, judicial management has never been regarded as a successful corporate rescue procedure and for most of its existence it has been severely criticised on many grounds. The Companies Act 61 of 1973 that replaced the Companies Act 46 of 1926 did very little to improve this situation and judicial management remained underutilised. As a result, the Companies Act 71 of 2008 now introduces two newly-created corporate rescue procedures in the form of business rescue proceedings and the compromise with creditors. This study analyses judicial management and the new corporate rescue procedures to establish whether the identified weaknesses of judicial management have been adequately and effectively addressed in the new procedures. A comparative study with similar procedures in England and Germany is undertaken to determine whether the South African legislature has delivered on its promise to create a system of corporate rescue that will meet the needs of a modern South African economy. Several weaknesses in the new procedures are identified and a number of recommendations are made to improve the relevant provisions and to assist in providing South African company law with an efficient and acceptable corporate rescue regime. / Mercentile Law / LLD (Mercentile Law)

Whenever legal disciplines overlap interesting scenarios occur and differences in opinions create intellectual tension. One such interesting scenario occurs when employees’ rights are affected during a company’s liquidation or business rescue. The employees of a company are normally the last persons to find out that a company is struggling financially. They are also the only stakeholders who are in no position to negotiate their risk should the company be liquidated. It is therefore necessary to evaluate the rights given to employees during a company’s liquidation and business rescue. The fundamental ideologies of company law, insolvency law and labour law are challenged and examined to attempt a harmonizing result that respects the core of each discipline. It is crucial to determine whether an appropriate balance is struck between the interests of all the stakeholders of the company during these procedures. The aim of this thesis is to evaluate whether South Africa manages to strike this balance. If employee rights are protected whilst a company is restructured back to solvency and success, this balance will be struck. An evaluation will also be made whether employees are always better protected during business rescue than in liquidation. The study analyses employee rights in a company’s liquidation and during a company’s restructuring process. The comparative study of employee rights in liquidation and rescue is done with the jurisdictions of Australia and England – countries with similar procedures. Important conclusions show that South Africa protects employee rights during business rescue procedures the best. An appropriate balance is indeed struck between the interests of all stakeholders of a company during business rescue procedures and employees are most of the time better off after a restructuring than in a liquidation. Should the recommendations for law reform be implemented in our legislation, South Africa will overcome the few obstacles currently in its way to be seen as a world leader where employee rights are concerned in liquidation proceedings as well as business rescue. / Mercantile Law / LL. D.

LLM / Department of Mercantile Law / This research examined the mechanisms that were employed by the Companies Act 71 of 2008 in order to protect the interests of creditors in company affairs. At the preamble of the aforementioned Act lies an undertaking from legislature to provide appropriate redress to investors and third parties/creditors. It was on that basis that the researcher sought to establish whether legislature had indeed fulfilled its commitment to provide appropriate redress to creditors. Traditionally, companies have been run to promote the interests of shareholders with little attention given to the interests of other stakeholders such as creditors. It is this research`s findings that South African company law has moved from the traditional view, that is the shareholder value approach, to the enlightened shareholder value approach: a model of corporate governance which permits directors to have regard, where appropriate, to the interests of other stakeholders but with shareholders’ interests retaining primacy. It is thus found that creditors cannot be protected by contract laws alone but that their protection should be enhanced by mandatory corporate laws which regulates the manner and conduct of company controllers in a way that ensures that the interests of all stakeholders, including creditors, are given due regard. Finally, it has been found that much work has been done by legislature in developing the re-enacted creditor protective mechanisms and also in statutorily adopting new mechanisms which are aimed at advancing creditor interests. Recommendations have thus been made to legislature for possible amendments to refine its corporate laws. / NRF

The South African Revenue Service has in the past had difficulty in applying debt forgiveness in cases of corporate and business rescues. Taxation legislation was drafted to counter innovative section 311 schemes of arrangements where the sole purpose was to obtain maximum taxations benefits in relation to entities in financial difficulties. This approach was only concerned with the interests of the Revenue authorities. The central theme of this study focuses of the procedures now available to tax authorities and debtors alike when compromises were and are considered in South Africa in terms of income tax and company legislation. The South Africa Revenue Service’s approach the corporate rehabilitation is examined which is vital for investors, creditors and debtors alike. A comparative study with similar procedures in England is undertaken to establish how valid the procedures are in establishing a viable corporate rescue environment in South Africa in the future. / Dissertation (LLM)--University of Pretoria, 2012. / Procedural Law / unrestricted