Section 154 of the Companies Act, No 71 of 2008 (Act) provides that a business rescue plan (BR plan) may provide that a creditor, who has acceded to the discharge of the whole or part of a debt owing to that creditor, will lose the right to enforce the debt or part of it. Furthermore, if a BR plan has been approved and implemented, a creditor is not entitled to enforce any debt owed by the company immediately before the beginning of the business rescue process, except to the extent provided for in the BR plan.

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 US Supreme Court, in an 8-1 decision authored by Justice Kagan, reversed a decision of the First Circuit and held that the rejection of a trademark license agreement under Bankruptcy Code Section 365 (11 U.S.C. § 365) constitutes a breach of the license agreement that has the same effect as a breach outside bankruptcy. Therefore, the licensor’s rejection of the license agreement does not rescind or terminate the licensee’s rights under the license agreement, including the right to continue using the mark. Mission Product Holdings Inc. v. Tempnology, LLC, Case No.

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:

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).

The Bill aims to amend, among others, the Insolvency Act, 1936 (Insolvency Act) to provide that secured creditors holding property pledged as security for the obligations of a South African party arising under a “master agreement” may:

The Supreme Court of the United States granted Mission Product Holdings’ petition for certiorari to determine whether a debtor-licensor can terminate the rights of trademark licensees by rejecting its trademark licensing agreements as part of its bankruptcy case. Mission Product Holdings, Inc. v. Tempnology LLC, Case No. 17-1657 (Supr. Ct. Oct. 26, 2018). The specific question presented is:

The US Court of Appeals for the 11th Circuit affirmed the district court’s dismissal of a fraudulent conveyance claim for a “blocking right” and right of first refusal under a patent transfer agreement, addressing the district court’s proper exclusion of expert testimony on whether the debtor was insolvent at the time of the relevant transfer. In re: Teltronics, Inc., Case No. 16-16140 (11th Cir. Oct. 2, 2018) (Kaplan, J).

We identify and explain four of the court’s key findings below:

1. “In all matters where execution is sought against a primary residence, the entire claim, including the monetary judgment, must be adjudicated at the same time”.

A recent federal bankruptcy court decision addresses important principles of fiduciary conduct (and the benefits of a state exculpatory statute) in the context of a financially distressed not-for-profit hospital.