The case of Kythera Court v Le Rendez-Vous Café CC trading as Newscafé Bedfordview case number 2016/11853 GLDJ reiterated the Supreme Court of Appeal (SCA) decision in Cloete Murray NO & another v Firstrand Bank Ltd T/A Wesbank 2015 (3) SA 438 (SCA) that an agreement can be cancelled during business rescue as the unilateral act of cancellation does not constitute enforcement action in terms of s133(1) of the Companies Act, No 71 of 2008 ( Act).

For companies with an appetite for strategic business growth rather than divestment, buying assets from insolvent companies is a particular avenue of opportunity. For example, in the current market, there may be opportunities to purchase oil & gas assets from companies that have not been able to survive the prolonged low oil price. Corporate Partner, Philip Mace, provides his top 'legal tips' for purchasing assets from, in this example, an English administrator of a company.

This is a follow-up to our previous client update on Swiber Holdings Limited written on 29 July 2016. To view our previous update, please click here.

Counterparties of Swiber Holdings Limited ("Swiber") and its group companies would do well to keep a close tab on any debts outstanding from the group.

Swiber, an SGX-listed company in the oil fields services sector, issued an announcement in the early hours of Thursday 28 July 2016 stating that it filed an application in the Singapore High Court for a voluntary winding up on Wednesday afternoon, together with an application to place the company under provisional liquidation.

The collapse of marine fuel trader OW Bunker & Trading A/S (“OW Bunker”) and its affiliates, in November 2014, has resulted in a blizzard of legal proceedings in the United States. Bunker suppliers and creditors of insolvent OW Bunker entities have sought to secure their claims by arresting vessels or proceeding directly against vessel owners and operators who contracted with OW Bunker entities to supply their vessels with bunkers.

There is little doubt that even the most thought-out, meticulous and well-structured business rescue plan cannot succeed unless there is some degree of financial support in the form of post-commencement finance (PCF) available, to allow the business to sail through the choppy waters of financial distress.

The Court of Appeal’s decision in the case of Heis v MF Global highlights the importance of documenting just who has responsibility for contributing to a defined benefit pension scheme.

EIS AND OTHERS V MF GLOBAL UK SERVICES LTD (IN ADMINISTRATION) [2016] EWCA CIV 569, [2016] ALL ER (D) 125 (JUN)

In Umso Construction (Pty) Ltd v Member of the Executive Council for Roads and Public Works Eastern Cape Province and Others ((20800/2014) [2016] ZASCA 61), the Supreme Court of Appeal considered the legal position where, following the award of a tender, it is discovered that the preferred bidder had been placed under business rescue during the bid evaluation process.

In Berryman v Zurich Australia Ltd [2016] WASC 196 it was decided that a bankrupt's entitlement to claim a TPD benefit under a life insurance policy is not an entitlement that is divisible amongst the bankrupt's creditors, and therefore such an entitlement does not vest in the Official Trustee in bankruptcy. Tottle J of the Supreme Court of Western Australia ruled that the bankrupt insured could continue an action in his own name to recover the TPD benefit. Life insurers may need to adjust their claims' payment practices in light of the Berryman decision.

In Roering & Another NNO v Mahlangu (581/2015) [2016] ZASCA 79 heard recently, the Supreme Court of Appeal (SCA) considered the circumstances that might justify a witness under subpoena applying for enquiry proceedings to be set aside or for the witness to be excused from attending those proceedings.

The general rule is that a subpoenaed witness is compelled to attend, subject to procedural requirements being met, and the evidence sought being relevant to the insolvent company or entity.