Department of Trade and Industry workshop on Chapter 6 of the Companies Bill (Business rescue)

Invitees

This closed workshop on Monday 11 June is for those parties and individuals that were invited by dti based on their submissions of comments on draft legislation received by 30 March 2007.

Issues to be discussed

• Should the South African Business Rescue regime be more ‘creditor friendly’ (in the manner of the insolvency regime) or more ‘debtor friendly’ (in the manner of turn around regimes in many other jurisdictions)?
• Who or what parties should be entitled to institute the business rescue proceedings?
• What is the appropriate triggering mechanism for a business rescue process:  Is it insolvency (or imminence of insolvency), an insolvency event, or some earlier other event/circumstance and, if the latter, how should this be defined?
• How can the process provide for adequate and meaningful consultation with stakeholders before a final decision is made to proceed with formal business rescue plan?
• What is the proper role and place of the supervisor?  What qualifications, if any, are needed?  What, if any, supervision or regulation of supervisors is needed?  To whom does the supervisor owe a duty?  Should the Bill permit performance compensation of the supervisor?
• Is it reasonable or necessary to designate some creditors as ‘independent’ for the purpose determining their voting rights in the process?
• What should the position of providers of post-commencement financing be relative to pre-commencement creditors?  Should the Bill compel suppliers, etc, to continue supplying the business under business rescue and, if so, what should the position be?
• If a business rescue calls for a fundamental transaction (i.e. scheme of arrangement, sale of substantially all the assets or undertaking, merger or amalgamation), should that transaction be exempt from Takeover Regulation Panel or continue to be subject to Panel supervision in addition to business rescue approval regime?
• To the extent that business rescue is to be judicially scrutinised, should it rely on the High Court or is a Specialist Court/Tribunal preferable and, why?
• Should there be a role for the current section 311 compromises in business rescue process?

For complete information, see Turnaround events.

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