Employment contracts were previously deemed to be suspended on the date of liquidation, being the date that the application for liquidation of the company is presented and issued at court in terms of s348 of the Companies Act, No 61 of 1973 (Old Companies Act). However, this position has since changed.

The Western Cape High Court^[1] has recently passed judgment in a decision which reiterates the bounds of the duties of directors of holding companies to subsidiary companies.  Even though the case involved a damages claim against the liquidators of the holding company (in liquidation), the principle applies equally to directors.

The restructuring of financially distressed companies is on the increase globally. In line with this international trend is Chapter 6 of the Companies Act, No 71 of 2008 (Act) which introduced business rescue into the South African corporate landscape.

Although business rescue has brought a much needed and long overdue alternative to liquidation for businesses in distress, it is also responsible for many points of contention. The most pertinent of these is currently the general moratorium found in s133 of the Act.

The Supreme Court of Appeal (SCA) in Lagoon Beach Hotel v Lehane (235/2015) [2015] ZA SCA 2010 (21 December 2015) recently considered the granting of a preservation order to a foreign trustee and the recognition of a foreign trustee by our courts in exceptional circumstances.

The commercial landscape in South Africa was forever changed when business rescue was introduced by Chapter 6 of the Companies Act, No 71 of 2008 (Act).

The proverbial "blind leading the blind" comes to mind when one recalls the great uncertainty which existed, and to an extent still exists, in the minds of business owners, creditors, employees and even business rescue practitioners as to the meaning of certain of the provisions of Chapter 6 of the Act.

On 8 July 2015, the Western Cape High Court, in the matter of University of Stellenbosch Legal Aid Clinic and Others v Minister of Justice And Correctional Services and Others, found section 65J(2)(b)(i) and section 65J(2)(b)(ii) of the Magistrates Court Act 32 of 1994 (“MCA”) inconsistent with the constitution and invalid to the extent that they fail to provide for juducial oversight over the issuing of an emolument attachment orders (“EOA”) /garnishee order against a judgement debtor.  This decision has serious i

Can an application for business rescue be brought even after a company has been placed in final liquidation?  The short answer, thanks to a recent Supreme Court of Appeal ("SCA") decision, is yes.

In Richter v Absa Bank Limited 2015, an interpretation of 'liquidation proceedings' within the context ofsection 131(6) of the Companies Act, 71 of 2008 ("the Act"), was central to the issue before the SCA.  

Section 131(6) of the Act reads as follows:

There have been a myriad of decisions on business rescue proceedings since the inception of the new Companies Act 71 of 2008 (“the Act”).  More recently, our courts have considered section 153(1)(b)(ii) of the Act which introduces the concept of a ‘binding offer’.

INTRODUCTION

This section allows one affected person to make an offer to purchase at liquidation value, the voting interests of those persons who opposed the adoption of the business rescue plan.

On 12 October 2015, the Deputy Minister of Justice and Constitutional Development, the Honourable John Jeffrey indicated that we are shortly to receive a revised and consolidated unified Insolvency Bill (“Bill”).

Insolvency Law, as we know it presently is, in addition to substantial case law precedent, governed by –

The Policy Framework Behind Section 34 of the Insolvency Act 2 Of 1936 ("the Act")

The policy of this section of the Act is to afford protection to a trader's creditors against his dispossessing himself of his property without paying his debt before the disposition or from the proceeds thereof.  This framework policy is well set out in the case of Paterson vs Kelvin Park Properties CC 1998: