When companies run into financial difficulties there are only two options: wind up the operations and liquidate the assets to pay out the creditors; or
if the company has some prospect of recovering from its present difficulties, to implement a turnaround strategy to rescue its operations.
Prior to the implementation of the Companies Act 2008 in May 2011 the only viable legislatively mandated position in South Africa was the liquidation route.
The Companies Act 2008 changed the corporate landscape by introducing a "Business Rescue Process" for companies that are "financially distressed" but which have a "reasonable prospect" for being rehabilitated.
Since 2011, thousands of South African "financially distressed" entities have accessed the new process, saving not only the business and its assets, but also vital employment opportunities.
In Business Rescue Casebook III, corporate and commercial law consultants Graeme and Veldra Fraser, building on two prior editions of this work, have compiled over 240 decisions of South African courts dealing with issues covering the entire spectrum on the "Business Rescue Process".
Topics covered include the difference between liquidation and business rescue, when is a company financially distressed, what is a "reasonable prospect", the role and appointment of the business rescue practitioner, the moratorium on actions against the company, the liability of sureties, the position of employees, the contents of the proposed business rescue plan and many other issues.
In each instance the salient facts and pertinent extracts from the judgment are provided, and the cases are conveniently arranged according to the central issue with some introductory comments to each section provided by the authors. To complete the work the relevant provisions of the Companies Act 2008 (ie Chapter 6) and the applicable Regulations are also included.
This work will be a useful resource not only to South African legal practitioners but also to lawyers in other jurisdictions where the legislation provides an alternative solution to the troubles of financially distressed businesses than merely liquidating them.
