Business rescue practitioner wants to be front of the queue when rescues fail
It was argued that to create a fairer balance of risks and rights, business practitioners should have a claim on unpaid fees
Business rescue practitioners should have a claim on unpaid fees during a liquidation, practitioner Ludwig Diener argued in the Constitutional Court on Thursday. Diener is appealing against a Supreme Court of Appeal judgment on whether business rescue practitioners enjoy a "super preference" over other creditors when a business rescue fails. Business rescue proceedings were introduced in 2011 to prevent struggling companies from entering liquidation. Two of SA’s oldest construction companies, Basil Read and Esor, are in business rescue at the moment, while the business rescue of Steval Engineering ended in failure last month. Business rescue allows a company to suspend all claims to creditors and restructure outstanding debt. This process is designed to help struggling entities to refinance themselves. Proceedings are also supposed to ensure that creditors will get more of the funds owed to them than if the company were liquidated.
Since 2011, secured creditors have been paid ...
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