Recent amendments to the Enforcement Procedure and the Interim Protection Act facilitate repayment in enforcement proceedings.

Introduction

Bills of exchange are mostly regulated by the sector specific act of 1946 (based on provisions of three 1930’s Geneva conventions). Provisions of other acts (eg, Obligation Code; Obligacijski zakonik) are used secondarily if the Bill of Exchange Act (Zakon o menici) does not contain applicable provisions.

This week the Slovenian Government sent a new law - the first big anti-corona law package - the Intervention Measures to Mitigate the Effects of the coronavirus (COVID-19) Infectious Disease Epidemic on Citizens and the Economy Act into the legislative procedure.

All insolvency proceedings (bankruptcy, and compulsory settlement) and court-sponsored financial restructurings (preventivna prestrukturiranja) in Slovenia are on hold until the recall of the COVID-19 epidemic (proceedings are currently expected to be on hold until 1 July 2020) (the "Recall"). During this time courts will not conduct the above-mentioned proceedings and no procedural and material deadlines will run.

The Companies and Intellectual Property Commission reported that between 2011 and 2018, a total of 2 867 South African companies initiated business rescue proceedings in terms of Chapter 6 of the Companies Act, 2008 (the “Companies Act”), with South African Airways SOC Limited (“SAA”) being the latest addition to this list. The purpose of these proceedings is to provide distressed companies with a fresh start by creating the potential for them to be rescued, to avoid insolvency and to ultimately be wound-up.

Once legal proceedings relating to a debt have started, does the subsequent substitution of one of the parties affect the prescription period for the debt? This was the crux of the recent Supreme Court of Appeal (“SCA”) case of Sentrachem Limited v Terreblanche.

A substitution occurs when a party to legal proceedings is replaced by another party, with no effect on the cause of action.

BUSINESS RESCUE, RESTRUCTURING AND INSOLVENCY: THE COURT’S POWER TO SET ASIDE THE DISSENTING VOTE OF A CREDITOR IN BUSINESS RESCUE PROCEEDINGS If satisfied that it is reasonable and just to do so, a court may set aside a dissenting vote on a business rescue plan. In Collard v Jatara Connect (Pty) Ltd & Others [2017] ZAWCHC 45, the court did exactly that. Explaining his decision, Judge Dlodlo stated that there should be no reason to prefer a winding up application over a business rescue plan that will pay the employees of the company in full and result in a better return for creditors.

Ever since the Companies Act, 2008 came into force, the courts have been inundated with cases pertaining to the interplay between the moratorium established by business rescue, the creditors’ claims and the effect of the business rescue plan.

Creditors face daily uphill battles when trying to collect money from debtors. Not only has the National Credit Act, No 34 of 2005 made it more onerous on creditors to recover debts due to them, but creditors must constantly be aware of the threat of a claim prescribing.

The Prescription Act, No 68 of 1969 (Act) provides that a debt is extinguished by prescription after the period set out in the Act.

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.

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).