On 19 February 2019, the African Global Group of companies (better known by its trading name, Bosasa) reported that it intends applying for its voluntary liquidation.
It reported that this decision was taken by the board of directors of Bosasa after being notified by its bankers that the groups’ bank accounts would be closed, with effect from the 1st of March 2019.
On 1 February 2019, the South African Minister of Finance published the Financial Matters Amendment Bill (the “Bill”) containing a long-awaited amendment to section 83 of the Insolvency Act, 1936.
This question arises frequently in practice. In October 2018 the Labour Appeal Court had occasion to consider the issue in the matter of South Africa Commercial Catering and Allied Workers Union (SACCAWU) obo Members v JDG Trading (Pty) Ltd. JDG Trading is a large SA corporation that, like others in a filing local economy, found itself caught in the tough financial headwinds
Human resources practitioners are often called upon to advise and lead employee consultation in a business restructure. Sometimes, a legal review of the statutory consultation notice issued under section 189(3) of the Labour Relations Act, 1995 (the LRA) is also undertaken.
It is trite that the purpose of business rescue proceedings is to rehabilitate companies that have fallen on hard times, with a hope of either rescuing them or to provide a better return to creditors than what they would receive on a liquidation. This was reiterated in the recent Supreme Court of Appeal (SCA) judgment of Van Staden and Others NNO v Pro-Wiz (Pty) Ltd (412/2018) [2019] ZASCA 7 (8 March 2019).
In many, if not all, commercial transactions, timing is everything, either for a distressed seller or a purchaser stumbling upon a deal that may almost be too good to be true. There is often no time to waste and a deal must be closed as soon as possible. In the haste of closing a deal, whether in the form of a sale of business or a sale of assets, the parties often agree not to comply with the provisions of s34(1) of the Insolvency Act, No 24 of 1936 (Act), each willing to take the risk in not doing so.
Section 34(1) of the Act provides that:
On 8 April 2019, the South African Financial Sector Conduct Authority and Prudential Authority (collectively, the “Authorities”) published yet another draft of the Joint Standard on Margin Requirements for Non-Centrally Cleared OTC Derivatives (the “Margin Requirements”). The last draft had been published in August 2018.
The legal principles relating to execution against movable property are more or less settled, less so the law relating to execution against immovable property. This is mainly because the right to housing is enshrined in s26 of the Constitution and the issue of land has become somewhat emotive and politicised in the recent past.
The promulgation of the Companies Act 2008 in South Africa saw the introduction of a company rehabilitation process termed 'business rescue'. As in many other jurisdictions, a company under business rescue enjoys a temporary moratorium on the prosecution of claims with a view to allowing the distressed company breathing space to reverse its financial difficulties and avoid full-scale liquidation.
It has been long-established by the classic fundamental principles of corporate law that companies are separate and distinct persons from their shareholders, directors and officers. From this flows the general principle that it is the company, and the company alone, that can be liable for its obligations. This holds even in cases of companies linked by direct and indirect share participation and which are, in their entirety, dominated by a parent company, often a mere holding company without any business activity. These are referred to in corporate jargon as “corporate groups”.