Introduction
Business Rescue has long been debated in South Africa and has been a hot topic for discussion for a number of years at many seminars and forums involving liquidators, lawyers, members of the Judiciary, the Department of Trade and Industry and representatives from the Ministry of Justice.
For many years practitioners in South Africa have taken note of the manner in which Chapter 11 filings work in the United States, and the various administration proceedings which operate in Australia and the United Kingdom.
The question has often been asked… What similar procedures have we had to fall back on in South Africa? Judicial management has always been the fall back position.
For many years legal practitioners and liquidators have accepted the fact that judicial management did not work in the South African scenario. Quite simply, judicial management was a precursor for liquidation proceedings. The reason for this was clearly that there was no obligation on the part of creditors or financiers to be placed in a position where they would be bound to a judicial management process by way of a court order. Once a judicial manager was appointed, any creditor would be entitled to place the company into liquidation. Looking through the various reported cases over the years, there have been a handful of judicial management matters, many of which have resulted in liquidation proceedings.
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