Could bankruptcy protection be on the horizon for individuals and companies actively involved in the cannabis industry? Potentially yes, following President Biden’s October 6, 2022 request for the Secretary of Health and Human Services to begin the administrative process to review marijuana’s classification as a Schedule I substance under the Controlled Substance Act (“CSA”).
Après plus de deux années mouvementées marquées par une pandémie, des conflits géopolitiques mondiaux, un ralentissement économique majeur suivi d’une succession record de rebonds des marchés financiers publics et privés, le milieu des affaires a dû adapter sa gestion du risque, et ce, à maintes reprises à travers ces situations exceptionnelles. Dans ce contexte, les entreprises font et feront face à des défis de taille.
After more than two turbulent years of a pandemic, global geopolitical conflicts, a serious economic downturn followed by a series of record rebounds in public and private financial markets, the business community has had to adapt its risk management repeatedly through these exceptional situations. In this context, companies face and will continue to face major challenges.
It is axiomatic – at least as a prima facie proposition – that insolvency is only concerned about assets which belong to the insolvent when the insolvency commences (or, as it is often said when a concursus creditorum is established on the commencement of insolvency). South African insolvency law respects property rights which have accrued under our law prior to the commencement of insolvency proceedings, including security interests such as mortgages, liens and cessions.
Voyager Digital Assets Inc., along with two of its affiliates, filed bankruptcy petitions in the Southern District of New York on July 5, 2022. The filing is significant—it followed months of an extreme downturn in the cryptocurrency sector which led to the collapse of Three Arrows Capital, a Singaporean cryptocurrency hedge fund (that borrowed $350 million and 15,250 Bitcoins from Voyager).
The South African economy has been significantly impacted by the Covid-19 pandemic. It is estimated that during the 2021 financial year alone, approximately four hundred companies were placed in business rescue. But what is business rescue and why is it relevant to small business owners and entrepreneurs in South Africa?
Introduction
Introduction
The Companies and Intellectual Property Commission (CIPC) issued a Business Rescue Proceedings Report (Business Rescue Report) on business rescue proceedings from its inception on 1 May 2011 to 31 December 2021 – a “ten-year” scorecard. It takes stock of how business rescue has developed over that period and whether South Africa has matured as a late entrant into the playing field of corporate restructuring regimes. The story must be told over the “ten-year” period and dissected into two parts: pre- and post-pandemic.
Chapter 6 of the Companies Act, 2008 affords a financially distressed company a fighting chance to restructure its financial obligations and avoid the destruction of value through liquidation for the duration of its formal chapter 6 business rescue proceedings. Such a moratorium is not available if a company seeks to conclude a restructure through a compromise or arrangement with all its creditors or members of any class of creditors.