CARMEL RICKARD: Laying down the law on business rescue
Late last year, business rescue specialists went to court over the future of game on a 2,800ha farm in Limpopo. They were concerned about the ongoing cost of feeding the animals and keeping them healthy, as well as the effect of the veld being overstocked at "criminally high levels". But they were also seeking clarity on a crucial legal point — one that affects other SA businesses in financial difficulties as well as business rescue practitioners (BRPs) involved in trying to assist these outfits. Until that case, there had been no decision by a court on whether it would cancel a contract already "suspended" as part of business rescue proceedings. The Companies Act allows BRPs to "suspend" contracts. But it also says BRPs may bring an urgent application to court asking that an "obligation" entered into by the ailing company be cancelled. Would a "contract" count as an obligation that could be cancelled? Would a court order that the contracts agreed to by the game farm be cancelled im...
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