When to start Business rescue Proceedings?
The simple answer is, as soon as a company detects the first signs of financial distress. Financially distressed means when it is reasonably unlikely that the Company (or CC) will be able to pay its debts as they become due or it is reasonable to assume the Company or CC will become insolvent within six months. The Business Rescue procedure broadly refers to proceedings to rescue or rehabilitate a Company which is under financial duress, i.e. not able to pay it’s debts as and when they become due.
Director’s obligation to place Company under rescue
If the board of directors of a company (or Members of CC) has reasonable grounds to believe that the Company/CC is financially distressed, they must apply for business rescue, and deliver a written notice to all shareholders, creditors, employees and trade unions, that the company is financially distressed, and give reasons why the company is not put under Rescue.
A business rescue order may be issued even after a final liquidation order was issued .
Resolution or High Court Application
The most common procedure to start the Business Rescue Process is a voluntarily resolution by the management of the company. The second and more expensive procedure is via a High Court application.
Effect of Business Rescue
During the Rescue Proceedings, there is as general moratorium on legal proceedings against the company, although subjected to a few exceptions. As a consequence all litigation is suspended and certain contracts can be renegotiated under the supervision of the Business Rescue Practitioner.
Why use us?
Time and skilful decision taking are of the essence. Moreover we believe we have the knowledge, ability and attention to detail required to assist Companies without delay in implementing a business rescue plan within the set timescales.