Business Rescue means proceedings to facilitate the rehabilitation of a company that is financially distressed by providing for-
(i) the temporary supervision of the company, and of the management of its affairs, business and property;
(ii) a temporary moratorium on the rights of claimants against the company or in respect of property in its possession; and
(iii) the development and implementation, if approved, of a plan to rescue the company by restructuring its affairs, business, property, debt and other liabilities, and equity in a manner that maximises the likelihood of the company continuing in existence on a solvent basis or, if it is not possible for the company to so continue in existence, results in a better return for the company‟s creditors or shareholders than would result from the immediate liquidation of the company;
Business rescue plan
Means a plan contemplated in section 150;
Means a person appointed, or two or more persons appointed jointly, in terms of this Chapter to oversee a company during business rescue proceedings and „practitioner‟ has a corresponding meaning;
In reference to a particular company at any particular time, means that-
(i) it appears to be reasonably unlikely that the company will be able to pay all of its debts as they become due and payable within the immediately ensuing six months; or
[Subpara. (i) substituted by s. 81 of Act 3/2011]
(ii) it appears to be reasonably likely that the company will become insolvent within the immediately ensuing six months;
Company resolution to begin business rescue proceedings
The board of a company may resolve that the company voluntarily begin business rescue proceedings and place the company under supervision, if the board has reasonable grounds to believe that-
(a) the company is financially distressed; and
(b) there appears to be a reasonable prospect of rescuing the company
Within five business days after a company has adopted and filed a resolution, as contemplated in subsection (1), or such longer time as the Commission, on application by the company, may allow, the company must-
(a) publish a notice of the resolution, and its effective date, in the prescribed manner to every affected person, including with the notice a sworn statement of the facts relevant to the grounds on which the board resolution was founded; and
(b) appoint a business rescue practitioner who satisfies the requirements of section 138, and who has consented in writing to accept the appointment.
After appointing a practitioner
(a) file a notice of the appointment of a practitioner within two business days after making the appointment; and
(b) publish a copy of the notice of appointment to each affected person within five business days after the notice was filed.
If a company fails to comply with any provision
(a) its resolution to begin business rescue proceedings and place the company under supervision lapses and is a nullity; and
(b) the company may not file a further resolution contemplated in subsection (1) for a period of three months after the date on which the lapsed resolution was adopted, unless a court, on good cause shown on an ex parte application, approves the company filing a further resolution.
General moratorium on legal proceedings against company
During business rescue proceedings, no legal proceeding, including enforcement action, against the company, or in relation to any property belonging to the company, or lawfully in its possession, may be commenced or proceeded with in any forum, except-
(a) with the written consent of the practitioner;
(b) with the leave of the court and in accordance with any terms the court considers suitable;
(c) as a set-off against any claim made by the company in any legal proceedings, irrespective of whether those proceedings commenced before or after the business rescue proceedings began;
[Para. (c) substituted by s. 84 of Act 3/2011]
(d) criminal proceedings against the company or any of its directors or officers;
[Para. (d) substituted by s. 84 of Act 3/2011]
(e) proceedings concerning any property or right over which the company exercises the powers of a trustee; or
[Para. (e) substituted by s. 84 of Act 3/2011]
(f) proceedings by a regulatory authority in the execution of its duties after written notification to the business rescue practitioner.
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