UNIVERSITY OF JOHANNESBURG KINGSWAY CAMPUS FACULTY OF LAW COMMERCIAL LAW 100 uniegsire 2021 JOHANNESBURG TUTORIAL 8: BUSINESS RESCUE (MEMORANDUM) Question 1 @) Match the question/statement in column A to the most accurate answer/description In column B: ‘A; Question/statement B: Answers/description 1. __| Office-holder appointed to oversee the business rescue | Business rescue practitioner process Benchmark for entering into business rescue Company under financial distress 3._| Affected person Creditor 4. | Contract that continues once the company has been | Employment contract placed under business rescue, and where the business rescue practitioner does not have a suspension right 5.__| Initiated by the board of the company Voluntary business rescue jonal/alternative unmatched answers to also be provided in column B: Liquidator Insolvent company | Lease agreement ‘Compulsory business rescue Question 2 (8) True / False: 1. The liquidator is tasked with investigating the affairs of the company under business rescue. [False] 2. Business rescue proceedings may in some instances be commenced without a court order. [True] 3. A company that has been placed under business rescue cannot ever be liquidated, as business rescue and liquidation are mutually exclusive. [False] 4, Business rescue proceedings can only be initiated by affected persons within a company. (False)5. Business Rescue proceedings may never be utlized to ensure a better retuin forthe company’s ‘redtors or shareholders than would result from the immediate lquldaton of the compar. (False) 6. Acompany is financially distressed iit appears reasonably unlkaly thet the company willbe able to pay al ofits debts as they become due and payable within the immediatly ensuing 6 ‘months and appears tobe reasonably likely that the company will become insolvent within the immediately ensuing 2. months, (False) 7. liquidation proceedings have already commenced against a company, then it may stil commence business rescue proceedings by suspending the liquidation proceedings until, court has dismissed the BR application oy i the court grants the order, untithe end ofthe BR proceedings. (True) 8. Interms of business rescue proceedings, employees ofthe company always continue to be employed onthe same T's as immediately before the proceedings. false) ‘Question a Elin the missing word: 1. The business rescue practitioner sets out the manner in which he/she proposes to rescue the company in a [business rescue plan), which needs to be approved by, among others, the creditor. 2. The main aim of business rescue proceedings to ensure thatthe company continues to exist ona [solvent] basis 3, Selina isa creditor of Mudau Properties Pty Ltd, she believes that they are curentiy financially distressed and should undergo business rescue proceedings. ellina has the power tonite BR proceedings as she is considered tobe an [affected] person. 4. Ifa business rescue plan Is [rejected], then the practioner can either obtain approval rom the meeting for hie to prepare and publish a revised plan or apply to court to set aside the result ofthe vote on the ground that it was inappropriate 5. Interms ofthe drafting ofa business rescue pan, the practitioner must consult with [creditors other affected persons and management ofthe company before preparing the plan, 6, The business rescue plan must be published within [25] business days after the practitioner's appointment, unless the court or holders ofa majority of creditors voting intrest allow a longer time. 7. Abbusiness rescue practioner may be [removed] If he/she falls to exercise the proper degree of carein performing duties Questions 115 marks) Match the columns: Financially stressed Requirement to commence business rescue proceedings Tioratorum on rts of creditors ‘One of the provisions for successful business recue proceedings Board resolution Voluntary Business Rescue ‘Compuliory Business rescue proceedings ‘Affected parties apply to our Business Rescue plan Must be approved before implemented Business rescue practitioner Rehabilitation ‘Similiar to liquidation proceedings (otal: 25 marks}