Business rescue - all you need to know! (SA 2020) скачать в хорошем качестве

Business rescue - all you need to know! (SA 2020)

How does business rescue work? In this video I talked to Coenraad van Beek from Posibly PTY Ltd who is a professional business rescue practitioner! Remember to like the video and subscribe to the channel! Here is his details if you need to get in touch with him! www.posibly.co.za Phone: +27 (083) 503 3133 +27 (012) 743 6222 Email: [email protected] Here are the notes on the discussion What is business rescue? Objectives of business rescue: to rehabilitate a company that is financially distressed; restructuring its affairs, business, property, debt and other liabilities , and equity in a manner that maximises the likelihood of the company continuing in existence on a solvent basis; or if it is not possible for the company to so continue in existence, results in a better return for the company’s creditors or shareholders than would result from the immediate liquidation of the company How do we achieve this? the Companies Act provides for (i) the temporary supervision of the company, and of the management of its affairs , business and (ii) a temporary legal moratorium on the rights of claimants against the company or in respect of property in its possession; and (iii) the development and implementation, if approved, of a plan to rescue the company. What does it mean to be financially distressed? A company is “financially distressed ” if at any particular time: (i) it appears to be reasonably unlikely that the company will be able to pay all of its debts as they become due and payable within the immediately ensuing six months; or (ii) it appears to be reasonably likely that the company will become insolvent within the immediately ensuing six months; How do you start business rescue proceedings? If the company is financially distressed and there is reasonable prospect to rescue the company 1.Directors decision a.Voluntary filing at CIPC and affected persons b.Section 129(7) notice to affected persons with reasons why they do not file for business rescue, possible personal liability of directors if they fail to do so 2.Affected persons court application a.Creditors b.Employees/Unions c.Shareholder Is there is a reasonable prospect of rescuing the business? a.When directors file voluntary for business rescue or applicants bring a court application they must believe and have reasonable grounds that there is a reasonable prospect to rescue the company b.Reasonable prospect is not defined by the Companies Act. Case law determined that it does not have to be probable , it must be based on demonstratable reasonable grounds c.Accountants play an important role here to provide reliable historical financial information, budgets and forecasts to show a reasonable prospect How does the business rescue process works? 1.It starts with the determination by directors or affected party that the company is financially distressed; 2. Voluntary filing by directors or court application by affected persons; 3.Within 5 business days notice to every affected person and appoint a business rescue practitioner 4. Within 2 days of business rescue practitioner appointment file notice with the CIPC and publish to every affected person 5. First creditors and employees representatives meeting within 10 days of appointment of business rescue practitioner 6. Second creditors meeting within 25 days of appointment of the business rescue practitioner to vote on published business rescue plan approval requires 75% voting creditors, 50% independent 7. On filing of substantial implementation at the CIPC by the business rescue practitioner the company comes out of business rescue and control move back to the board of directors. Impact of business rescue proceedings • Legal moratorium  no legal proceedings, including enforcement action, may be commenced or continued with in any forum against the company, or in relation to any property belonging to the company, or lawfully in its possession, during the business rescue proceedings without BRP consent • Property  the company may dispose, or agree to dispose, of property only (i) in the ordinary course of its business; (ii) in a bona fide transaction at arm’s length for fair value approved in advance and in writing by the practitioner; or (iii) in a transaction contemplated within, and undertaken as part of the implementation of, a business rescue plan • Employees  employees of the company immediately before the beginning of those proceedings continue to be so employed on the same terms and conditions, except to the extent  that (i) changes occur in the ordinary course of attrition; or (ii) the employees and the company, in accordance with applicable labour laws, agree different terms and conditions; and  any retrenchment of any such employees contemplated in the company’s business rescue plan is subject to section 189 and 189A of the Labour Relations Act