oa De Rebus - The cedent, the cessionary and the moratorium - quo vadis? : opinion - commercial law
|Article Title||The cedent, the cessionary and the moratorium - quo vadis? : opinion - commercial law|
|© Publisher:||Law Society of South Africa|
|Affiliations||1 Smit Sewgoolam Inc and 2 Smit Sewgoolam Inc|
|Publication Date||May 2016|
|Pages||51 - 52|
A business (the company) borrows money from a credit provider (the bank) in order to finance its day-to-day operations (the debt). In securing the debt, the bank takes cession in securitatem debiti of all the company's book debts. Subsequent thereto, the company is placed under supervision in terms of ch 6 of the Companies Act 71 of 2008 (the Act) - namely, the provisions relating to business rescue. These provisions, specifically those contained in s 133, among others, stipulate that there is a moratorium on legal proceedings against the company (including enforcement action) or in relation to property belonging to the company. Confronted with these facts, can the bank now realise its securities held (and by implication, exert its securities held as aforesaid) notwithstanding the aforesaid moratorium?
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