Insolvency and business rescue
Introduction
Debt management is a crucial element of financial success. The increasing complexity of corporate and financial structures highlights the need for expert advice to pre-empt financial overexposure and prevent the risk of insolvency. Liquidation has also become a recognised restructuring tool for commercial enterprises.The much anticipated Business Rescue Provisions in the New South African Companies Act will provide the means to restructure and recapitalise a company in financial distress to avoid insolvency, which has previously been unattainable in South Africa. It will allow you, where you have invested in a company, to participate if viable, in recovering your investment.
How we can help you
Our experience allows us to establish whether a sequestration or liquidation application is the most efficient and appropriate method to achieve recovery or whether a money judgment application or action is better suited to our clients’ needs. We advise clients on the security they may hold, how best this advantage, if any, can be secured and what further steps are necessary to improve their position.
We are also able to advise clients on the various implications of schemes of arrangements and offers of compromise, as well as the refinancing of liabilities by way of issuing preferent shares or utilising other recapitalisation tools.
In the current economic climate, proactive concise advice from lawyers capable of working in teams across disciplines and sectors is required. We regularly work as a multi-disciplinary team with our colleagues in banking, construction, tax, commercial, employment, litigation and other areas of law and draw on the expertise of our Eversheds International colleagues, where more than one jurisdiction is involved.
Our team can assist you both on your business and on your investments to:
- Identify whether a problematic business has potential
- Liaise with the stakeholders, both internally and outside the business
- Identify the causes of the business’ problems and ascertain what can be done to avoid them
- Formulate a strategy to combine a constructive legal process with business expertise in order to devise solutions to the identified problems and try to anticipate and avoid further problems
- Impose an appropriate framework and structure on the new organisation
- Advise directors on their fiduciary and personal obligations in a distressed company
We offer a dedicated service regarding insolvency, liquidations, restructuring, money judgment applications and actions, as well as assessing the validity of claims, possibility of instituting proceedings against directors, setting aside undue preferences, the conduct of enquiry proceedings, and the potential recovery of assets pursuant thereto.
