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the resolution has been adopted and filed with CIPC. During business
rescue proceedings no legal action including enforcement action
may be instituted against the company, except with written consent
thereto by the BRP or with leave of a court.
The BRP is responsible for assessing the affairs of the company, holding
meetings with creditors, other affected persons and management of
the company and compiling a business rescue plan which needs to
be voted on and accepted by all affected persons. The business rescue
plan must indicate amongst others the probable dividends creditors
would have received if the company was placed under liquidation
and must prove that under business rescue the company is able to Commercial
generate a better monetary return for its creditors than in the event of
liquidation.

The plan must further set out the advantages of business rescue over
liquidation. Once the business rescue plan is adopted it binds the
company, creditors and holders of any securities against the company.

Business rescue compared to liquidation provides for the company’s
debt to be managed and contracts restructured and reorganised
in order for the company to continue to trade on a solvent basis
rather than selling off all of the company’s assets and the company
being shut down as in the case of liquidation. If it does happen that
business rescue is unsuccessful, the BRP may apply to court to have
the company liquidated. The business rescue process is therefore a last
lifeline to try and turn a company around before it has to close its doors
when liquidated.
In your case, your views on the potential to rescue the company and
the degree of financial distress the company is in, will determine which
of these proceedings are the most appropriate route (if any) to be
followed. Consider enlisting the help of a legal practitioner to help
discuss in more detail the pro’s and con’s of these legal options for
your company.

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