n SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - The leak in the Chapter 6 lifeboat : inadequate regulation of business rescue practitioners may adversely affect lenders' willingness and the growth of the economy




The Companies Act 71 of 2008 ('Companies Act 2008') provides in its Chapter 6 ('Chapter 6') for 'business rescue'. This procedure is intended to provide for temporary measures to facilitate the rehabilitation of financially distressed companies. During business rescue, the company's management will be under supervision and a moratorium on the rights of claimants against the company will operate. The rescue itself will be effected by a 'business rescue plan' provided for in the Act, in terms of which the company's affairs, business, property, debt and other liabilities and equity will be restructured 'in a manner that maximises the likelihood of the company continuing in existence on a solvent basis or, [if this is not possible], results in a better return for the company's creditors or shareholders than would result from the immediate liquidation of the company ...'.


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