Facility agreements ordinarily oblige a borrower to prepay the facility on the occurrence of certain events, including, if a borrower receives insurance proceeds or asset sale proceeds during the loan term. The rationale for this is that lenders wish to use this unexpected windfall to mitigate the risk of non-payment. This is also the approach of the Loan Market Association (LMA) in its standard facility agreements.

Employment contracts were previously deemed to be suspended on the date of liquidation, being the date that the application for liquidation of the company is presented and issued at court in terms of s348 of the Companies Act, No 61 of 1973 (Old Companies Act). However, this position has since changed.

The Third Parties (Rights Against Insurers) Act 2010 (the 2010 Act) will finally come into force from 1 August 2016.

The Act improves the rights of claimants who have a claim against an insolvent company or individual to directly claim against the insolvent party’s insurer.

In particular, the 2010 Act brings about the following important changes:

Section 133 of the Companies Act, No 71 of 2008 places a general moratorium on legal proceedings, while the company is under business rescue. This provides a company with time and resources to be rehabilitated through the implementation of a business rescue plan. As a result, there is some debate as to whether creditors are precluded from perfecting their security, such as a notarial bond, under business rescue.

Although the EU Insolvency Regulation and the UNCITRAL Model Law have been with us for some time, decisions involving the court’s recognition of foreign proceedings continue to evolve and will – of necessity – turn on the specific facts of every case. We investigate two recent decisions which came up with very different results.

The background – Re OGX Petroloeo E Gas S.A. [2016] EWHC 25

The past few months have seen some interesting developments in legislative and regulatory requirements in the restructuring and insolvency world. We explore a number of them in this article.

SBEEA – reports on director conduct from 6 April

The Small Business, Enterprise and Employment Act 2015 (Commencement No 4), Transitional and Savings Provisions Regulations 2016 (SI 2016/321) were made on 9 March 2016.

There has always been a degree of uncertainty when it comes to a business rescue practitioner’s costs and expenses incurred in the business rescue proceedings of an entity when the business recue proceedings are, for whatever reason, converted to liquidation proceedings.

The ‘dual jurisdiction’ regime has long been entrenched in South Africa’s corporate insolvency law. This principal arises from the provisions of the Companies Act, No 61 of 1973 (Old Act), which provides that jurisdiction over a company is determined by the location of both its registered address and its principal place of business with the creditor having the choice of jurisdiction.

With the enactment of the Companies Act, No 71 of 2008 (New Act), the question that then follows is: Does this principle of jurisdiction continue to apply under the New Act?

In order for an application for business rescue to successfully suspend commenced liquidation proceedings, it must be served on the Companies and Intellectual Property Commission (CIPC), together with all affected persons in terms of the Companies Act, No 71 of 2008 (Act). This position was confirmed in the Gauteng Local Division’s decision handed down on 10 March 2016.

The Supreme Court of Appeal (SCA) in Lagoon Beach Hotel v Lehane (235/2015) [2015] ZA SCA 2010 (21 December 2015) recently considered the granting of a preservation order to a foreign trustee and the recognition of a foreign trustee by our courts in exceptional circumstances.