Directors and business rescue in the time of COVID-19
The COVID-19 pandemic and the resultant lockdown have opened up new avenues of profit for some businesses, but they have also subjected many others to the spectre of business failure. Unfortunately we can expect the level of bankruptcies to surge for some time to come, and the domino effect will multiply the numbers until our […]
Are your suretyships enforceable? A R5.5m lesson for directors and creditors
“Some people use one-half their ingenuity to get into debt, and the other half to avoid paying it” (George Prentice, newspaper editor and author) You are owed a lot of money by a company that goes into business rescue. The business rescue plan provides for creditors like you to accept a dividend of only a […]
BUSINESS RESCUE AND SURETYSHIPS: CREDITORS AT RISK
Consider this scenario. It’s unfortunately one all too likely to face creditors in these hard times One of your corporate customers runs up a substantial debt, finds itself in financial distress, and applies for business rescue You suspect that somewhere down the line you will have to write off at least part of your claim […]
BUSINESS RESCUE: ARE SURETIES AT RISK?
“With surety stronger than Achilles’ arm” (Shakespeare) Creditors of a company in business rescue can, per a recent High Court decision, still sue the sureties. Although the company itself is protected from legal action by its creditors, there is no similar protection for sureties. The R16.6m claim, and the sureties’ defences fail The facts of […]