A South African First!
Business Rescue and Compromise Offers

Robert Appelbaum and Karl Gribnitz have published the first book in South Africa dealing with the intricacies of Business Rescue and Compromise offers, incorporating colours and shapes into their system to demystify the Act.

Easy for everyone

This unique book has a wide audience, ranging from a business person who needs a navigation guide and simply wants to know the basics of what to do, to the senior legal practitioner who wants to research the newest case law. The legislative intent behind Business Rescue and Compromise Offers was to provide for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders.

Implementation difficult

This laudable intention is difficult to implement by even the most able practitioner who has to consider 1,075 obligations, rights and conditions in a space of 25 working days! Even if the practitioner asks the creditors to extend the time period, a legal team has to find only one obligation or condition that has not been met, to be able to mount a challenge in court and have the entire business rescue overturned.

A balancing act

Courts should consider balancing the rights of the collective against the rights of individual, as intended in Act, and should also consider the economic impact on the employees and other affected parties, before simply making a decision about what is technically correct or not.

A complex process

The process of business rescue is complex and onerous. The probability of fractious dissent is high. Especially, as a requirement for compromise, which is used to allow the business to move forward onto a firmer financial footing, can negatively impact the affected parties in the short term. Affected parties, whether shareholders, employees, trade unions or creditors, need to know what their rights and obligations are, and what conditions they need to fulfil.

The book sets out clearly what affected parties can do to actively drive the process forward and become part of the future profitable solution of the business.

A systematic approach

Each section of Chapter 6, from section 128 to section 155, is carefully analysed and set out using a unique system, diagrammatically explaining a difficult text and plotting a path through the interlinked sections, sub-sections and regulations that make up the chapter.

"This systematic approach determines graphically which obligations, rights and conditions must be complied with, by whom, when, and how”

In essence, they have created a road map that the Practitioner can use to comply with the extensive legislation that is Business Rescue. References made in Chapter 6 to external chapters in the Act, or even different acts, have been included.

Attention to detail

It is an unfortunate reality that not all practitioners of Business Rescue have the necessary skills and experience, wanting to simply manage the business administratively.

This book clearly sets out the process that the affected parties can collectively follow to determine if the practitioner is working for the good of the company, and if not, what steps to follow if changes need to be made.

Timing is important, and knowing what steps to follow as set out in the legislation to safeguard the assets of the distressed business needs prompt action and attention to the details as set out in the book.

Strict compliance required

The legislation for Business Rescue is prescriptive and requires strict compliance for there to be any chance of a successful rescue.

The Business Rescue process has had a number of legal challenges, mostly dealing with the procedural aspects of business rescue.

The book includes the resultant case law by section and sub-section, and updated regularly on their website www.GnACompass.co.za, freely accessible with every book purchased.

This book is a must have for every person involved in Business Rescue and Offers of Compromise and can be purchased at www.GnACompass.co.za