LL.M. (Commercial Law) / The introduction of Chapter 6 of the Companies Act No 71 of 2008 into the South African corporate insolvency setting had a noteworthy impact on procedures as we knew it and replaced its predecessor, judicial management in terms of the Companies Act no 61 of 1973. Chapter 6 provides for business rescue proceeding, its main function being to assist and rehabilitate financially distressed companies. The significance of this chapter is that it promotes proactive action to be taken by companies in initiating business rescue proceedings when possible financial distress becomes apparent. Business rescue proceedings can commence by making use of S 129 of the Companies Act No 71 of 2008 or of S 130 of the Companies Act No 71 of 2008. S 129 allows for the board of directors of the company to pass a resolution permitting business rescue proceedings to apply to the relevant company. S 130, on the other hand, makes provision for an affected person to apply to the High Court with a query regarding a company and business rescue proceedings. A remarkable number of new provisions were introduced relating to business rescue procedures and with their introduction came the responsibility of our Courts to interpret its rightful place within our law. As a result, the valuable question of when our courts should aim to rescue a company and when to liquidate the company’s assets in order to settle its debts, must be asked. Both proceedings have the same aim; that is helping the financially distressed company pay its debts. However, both also employ vastly different methods to achieve their aims and with different consequences. Business rescue aspires to rescue the company by restructuring its financial arrangements in order to allow for the business of the company to be sold as a going concern. Business rescue further aims to help the company settle all its claims against it in full. Liquidation, on the other hand, aspires to sell all the company’s assets and divide the profit of the sale to settle the claims of the company’s creditors. The company will thereafter be dissolved. This dissertation aims to analyse the suitability of business proceedings compared to liquidation proceedings by purposefully examining the requirements for both proceedings as well as their advantages. Furthermore, this dissertation will provide for a comparative study between the Australian and South African business rescue proceedings respectively.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uj/uj:13733 |
| Date | 14 July 2015 |
| Source Sets | South African National ETD Portal |
| Detected Language | English |
| Type | Thesis |
| Rights | University of Johannesburg |
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