n South African Law Journal - The new business rescue : will creditors sink or swim?
|Article Title||The new business rescue : will creditors sink or swim?|
|© Publisher:||Juta Law Publishing|
|Journal||South African Law Journal|
|Affiliations||1 University of Cape Town|
|Publication Date||Jan 2011|
|Pages||352 - 380|
Chapter 6 of the Companies Act 71 of 2008, containing the new 'business rescue' provisions, marks a significant change in South African corporate law. It replaces the 'judicial management' provisions of the Companies Act 61 of 1973 with a procedure for the rescue of financially distressed companies, now under the supervision of a business rescue practitioner, to enable such companies to reorganise their affairs extra-judicially to avoid insolvency where at all possible. The new business rescue provisions adjust the previous emphasis on creditors' interests under the judicial management regime, to a more balanced consideration of the interests of debtors and other 'stakeholders' in addition to the interests of creditors. Although this shift away from an emphasis on creditors' interests brings South Africa into step with many recent international developments in this area of law, creditors are likely to be apprehensive about having their interests weighed against those of other 'affected persons'. This article seeks to assess the protection afforded to creditors in regard particularly to access to, and commencement of the rescue process, as well as the post-commencement moratorium on legal proceedings against the company being rescued and the supervisory role of the business rescue practitioner.
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