Abuse of business rescue process

In Absa Bank Limited v Newcity Group (Pty) Ltd and Another Related Matter [2013] 3 All SA 146 (GSJ) the court reiterated the following general principles applicable to business rescue applications, namely:

•The threshold standard for deciding that a business rescue order is appropriate is whether there is a ‘reasonable prospect or reasonable possibility’ of achieving a rescue through the statutory objectives stated in s 128(1)(b) of the Act. In this regard the point of departure is that it is preferable to rescue a company than to let it drift, or sometimes plummet, into extinction.

•Close scrutiny of the factual platform presented and the rationale mounted on that platform are required in order to decide if the threshold standard has been met. The assessment has to be made on solid information presented to the court, not on conjecture.

•The risk of abuse or manipulation of the rescue application process through ‘un-genuine’ applications to procure an illegitimate immunity must be guarded against

“I have successfully used Shaun in commercial arbitration, corporate/commercial law matters and in the arena of insolvency law, in all of which he is well accomplished.”
- Grant Davidson [businessman for three decades]

“Shaun is well versed in business and the laws governing general business, but particularly the information technology industry and Shaun is professional and loyal to a fault”
– Tinus Neethling [managing director of Rorotika Technologies]

“Shaun is imaginative, hardworking, accommodating and honest – Shaun acted for Pirelli Tyres before, while and after I was the managing director of the company, dealing with all legal matters, including the drafting and enforcement of various types of contracts and other litigious matters.”
- Ashley Cooper [former managing director of Pirelli Tyres]

“Shaun’s service is efficient, honest and of the highest professional standard – Shaun acted for the construction companies of which I was the financial director/officer, dealing with all legal matters related to the construction industry, including litigation and the drafting and enforcement of construction related contracts and negotiations.”
- Carel van Reenen [former financial director of Stocks Roads]

“Shaun Nel’s  services were consistently of the highest ethical & professional standards I experienced in my near four decade banking career – Shaun having acted for the bank in enforcing
lending agreements, drafting bank related agreements and giving guidance on various aspects involving banking.”
- William King Powell [retired Standard Bank manager]

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Email: shaun.nel@shaunnel.co.za