10/02/2020
Business rescue proceedings are proceedings aimed to facilitate the rehabilitation of a company that is financially distressed by providing for the temporary supervision of the company, and the management of its affairs, business and property by a business rescue practitioner (“BRP”); a temporary stay on the rights of claimants against the company or in respect of property in its possession; and the development and implementation, if approved, of a business rescue plan to rescue the company by restructuring its business, property, debt, affairs, other liabilities and equity.
The aim of business rescue is to restructure the affairs of a company in such a way that either maximizes the likelihood of the company continuing in existence on a solvent basis, or results in a better return for the creditors of the company than would ordinarily result from the liquidation of the company.
A business rescue practitioner (BRP) is appointed to oversee a company during business rescue proceedings; his role is largely supervisory and he is subject to the duties of a director of the company, with extensive powers over the pre-existing management
Section 140(1)(a) and (b) provides that “during a company’s business rescue proceedings, the practitioner, in addition to any other powers and duties set out in this Chapter- (a) has full management control of the company in substitution for its board and pre-existing management; (b) may delegate any power or function of the practitioner to a person who was part of the board or pre-existing management of the company”.
The employees in terms of Section 144 are represented by a registered Trade Union and may exercise their right collectively and in accordance with applicable labour law. In absence of a registered Union, they will still be represented in terms of Section 149.
Section 149 (1)(a) provides that (1)A committee of employees, or of creditors, appointed in terms of section 147
or 148, respectively—
(a) may consult with the practitioner about any matter relating to the business
rescue proceedings, but may not direct or instruct the practitioner;
Considering the steps taken by SAA’s BRPs, they are empowered to act as such, their role is to ensure he SAA is rescued. On the other hand the affected parties are allowed to make representations to the BRPs, but not to instruct them. It must be noted that the BRPs are yet to develop the Business Rescue Plan which is subject to approval by various stakeholders.
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