In these difficult economic times, companies seeking additional liquidity may turn to alternative sources of financing. Companies with assets that can be monetized (e.g., accounts receivable, intellectual property, real estate, equipment, etc.) may discover a number of options available to them. In particular, accounts receivable financing may be an attractive way for certain companies to obtain working capital relatively quickly.

Section 134 of Act 71 of 2008 is extremely important because it is there to protect the interests of both the company in business rescue and the creditors and other third parties related to the company.

Judge Megarry in Re Rolls Razor Limited¹, aptly describes the necessity of insolvency enquiries:

One of the first cases involving the operation of section 153(1)(a)(ii) of the Companies Act 71  of 2008 is the matter of Copper Sunset Trading 220 (Pty) Ltd t/a Build It Lephalale (In Business Rescue) and Spar Group Limited (First Respondent) and Normandien Farms (Pty) Ltd (Second Respondent).  This matter was decided under case 365/2014 in the High Court of South Africa (Gauteng Division, Pretoria) functioning as Limpopo Division, Polokwane.

Judge Andre van Niekerk handed down an interesting judgment in the High Court of South Africa (North Gauteng Division) on 30 September 2013.  In my respectful opinion the judgment is insightful and is correct.  The facts are fairly simple.  Miles Plant Hire (Pty) Ltd (MPH) had a tax liability of R37 441 090.59 to the commissioner of the South African Revenue Services (SARS). SARS had levied a tax assessment in this amount on MPH, which included penalties and interest.

An interesting judgment was delivered by the Honourable J Majiki on 19 of November 2013 in the Eastern Cape High Court, Port Elizabeth. The first and second applicants under case 3521/2012 were ABSA Bank Limited and Maria Ramos respectively.