Given the current parlous financial state of the local construction industry, many companies face the possibility of financial collapse. Unfortunately, in the past, companies in financial distress faced liquidation or judicial management offering no real help or the possibility of survival and or recovery for such companies. However, Chapter 6 in the recently enacted the Companies Act (Ac 71 of 2008) has created a solution to provide companies with the required help when in financial distress called “business rescue”. But how will Chapter 6 affect creditors of a business placed under business rescue?
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Written by Niel Coertse
Associate, MDA Consulting
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