References

References

• s.128(1)(a) “affected person”, in relation to a company, means – (i) a shareholder or creditor of the company; (ii) any registered trade union representing employees of the company; and (iii) if any of the employees of the company are not represented by a registered trade union, each of those employees or their respective representatives;
• s.128(1)(b) “business rescue” means proceeding to facilitate the rehabilitation of a company that is financially distressed by providing for – (i) the temporary supervision of the company, and of the management of its affairs, business and property; (ii) a temporary moratorium on the rights of claimants against the company or in respect of property in its possession, and (iii) the development and implementation, if approved, of a plan to rescue the company by restructuring its affairs, business, property, debt and other liabilities, and equity in a manner that maximises the likelihood of the company continuing in existence on a solvent basis, or if it is not possible for the company to so continue in existence, results in a better return for the company’s creditors or shareholders than would result from the immediate liquidation of the company;
• s.128(1)(f) “financially distressed”, in reference to a particular company at any particular time, means that – (i) It appears to be reasonably unlikely that the company will be able to pay all of its debts as they fall due and payable within the immediately ensuing six months; or (ii) It appears to be reasonably likely that the company will become insolvent within the immediately ensuing six months;
• s.129 “Company resolution to begin business rescue proceedings” – (1) Subject to subsection (2)(a), the board of a company may resolve that the company voluntarily begin business rescue proceedings and place the company under supervision, if the board has reasonable grounds to believe that – (a) the company is financially distressed; and (b) there appears to be a reasonable prospect of rescuing the company; (2)A resolution contemplated in subsection (1) – (a) may not be adopted if liquidation proceedings have been initiated by or against the company; and (b) has no force or effect until it has been filed.
• s.130 “Objections to company resolution” – (1) Subject to subsection (2), at any time after the adoption of a resolution in terms of section 129, until the adoption of a business rescue plan in terms of section 152, an affected person may apply to a court for an order – (a) setting aside the resolution, (b) setting aside the appointment of the practitioner, (c) requiring the practitioner to provide security in an amount and on terms and conditions that the court considers necessary to secure the interests of the company and any affected persons.
• s.131 “Court order to begin business rescue proceedings” – (1) Unless a company has adopted a resolution contemplated in section 129, an affected person may apply to a court at any time for an order placing the company under supervision and commencing business rescue proceedings. (2) An application in terms of subsection (1) must – (a) serve a copy of the application on the company and the Commission; and (b) notify each affected person of the application in the prescribed manner. (3) Each affected person has a right to participate in the hearing of an application in terms of this section. (4) After considering an application in terms of subsection (1), the court may – (a) make an order placing the company under supervision and commencing business rescue proceedings, if the court is satisfied that – (i) the company is financially distressed; (ii) the company has failed to pay over any amount in terms of an obligation under or in terms of a public regulation, or contract, with respect to employment-related matters; and (iii) it is otherwise just and equitable to do so for financial reasons, and there is a reasonable prospect for rescuing the company; or (b) dismissing the application, together with any further necessary and appropriate order, including an order placing the company under liquidation. (5) If the court makes an order in terms of subsection (4)(a) the court may make a further order appointing as interim practitioner a person who satisfies the requirements of section 138, and who has been nominated by the affected person who applied in terms of subsection (1), subject to ratification by the holders of a majority of the independent creditors’ voting interests at the first meeting of creditors, as contemplated in section 147. (6) If liquidation proceedings have already been commenced by or against the company at the time an application is made in terms of subsection (1), the application will suspend those liquidation proceedings until – (a) the court has adjudicated upon the application; or (b) the business rescue proceedings end, if the court makes the order applied for. (7) In addition to the powers of a court on an application contemplated in this section, a court may make an order contemplated in subsection (4), or (5) if applicable, at any time during the course of any liquidation proceedings or proceedings to enforce any security against the company. (8) A company that has been placed under supervision in terms of this section – (a) may not adopt a resolution placing itself in liquidation until the business rescue proceedings have ended as determined in accordance with section 132(2); and (b) must notify each affected person of the order within five business days after the date of the order.
• s.132 “Duration of business rescue proceedings” (1) Business rescue proceedings begin when – (a) the company – (i) files a resolution to place itself under supervision in terms of section 129(3); or (ii) applies to the court for consent to file a resolution in terms of section 129(5)(b); (b) a person applies to the court for an order placing the company under supervision in terms of section 131(1); or (c) during the course of liquidation proceedings, or proceedings to enforce a security interest, a court makes an order placing the company under supervision. (2) Business rescue proceedings end when – (a) the court – (i) sets aside the resolution or order that began those proceedings; or (ii) has converted the proceedings to liquidation proceedings. (b) the practitioner has filed with the Commission a notice of the termination of business rescue proceedings; or (c) a business rescue plan has been – (i) proposed and rejected in terms of Part D of this Chapter, and no affected person has acted to extend the proceedings in any manner contemplated in section 153; or (ii) adopted in terms of Part D of this Chapter, and the practitioner has subsequently filed a notice of substantial implementation of that plan. (3) If a company’s business rescue proceedings have not ended within three months after the start of those proceedings, or such longer time as the court, on application by the practitioner, may allow, the practitioner must – (a) prepare a report on the progress of the business rescue proceedings, and update it at the end of each subsequent month until the end of those proceedings; and (b) deliver the report and each update in the prescribed manner to each affected person, and to the (i) court, if the proceedings have been the subject of a court order; or (ii) Commission, in any other case.
• s.132(3) If a company’s business rescue proceedings have not ended within three months after the start of those proceedings, or such longer time as the court, on application by the practitioner, may allow, the practitioner must – (a) prepare a report on the progress of the business rescue proceedings, and update it at the end of each subsequent month until the end of those proceedings; and (b) deliver the report and each update in the prescribed manner to each affected person, and to the (i) court, if the proceedings have been the subject of a court order; or (ii) Commission, in any other case.
• s.133 “General Moratorium on legal proceedings against company” – (1) During business rescue proceedings, no legal proceeding, including enforcement action, against the company, or in relation to any property belonging to the company, or lawfully in its possession, may be commenced or proceeded with in any forum”, (2) During business rescue proceedings, a guarantee or surety by a company in favour of any other person may not be enforced by any person against the company except with leave of the court and in accordance with any terms the court considers just and equitable in the circumstances. (3) If any right to commence proceedings or otherwise assert a claim against a company is subject to a time limit, the measurement of that time must be suspended during the company’s business rescue proceedings.
• s.136(1) “Effect of business rescue on employees and contracts” – (1) Despite any provision of an agreement to the contrary – (a) during a company’s business rescue proceedings employees of the company immediately before the beginning of those proceedings continue to be so employed on the same terms and conditions, except to the extent that – (i) changes occur in the ordinary course of attrition; or (ii) the employees and the company, in accordance with applicable labour laws, agree different terms and conditions; and (b) any retrenchment of any such employees contemplated in the company’s business rescue plan is subject to section 189 and 189A of the Labour Relations Act, 1995 (Act No. 66 of 1995), and other applicable employment related legislation.
• s.137 “Effect on shareholders and directors” – (1) During business rescue proceedings an alteration in the classification or status of any issued securities of a company, other than by way of a transfer of securities in the ordinary course of business, is invalid except to the extent – (a) that the court otherwise directs; or (b) contemplated in an approved business rescue plan. (2) During a company’s business rescue proceedings, each director of the company – (a) must continue to exercise the functions of director, subject to the authority of the practitioner; (b) has a duty to the company to exercise any management function within the company in accordance with the express instructions or direction of the practitioner, to the extent that it is reasonable to do so; (c) remains bound by the requirements of section 75 concerning personal financial interests of the director or a related person; and (d) to the extent that the director acts in accordance with paragraphs (b) and (c), is relieved from the duties of a director as set out in section 76, and the liabilities set out in section 77, other than section 77(3)(a), (b) and (c). (3) During a company’s business rescue proceedings, each director of the company must attend to the requests of the practitioner at all times, and provide the practitioner with any information about the company’s affairs as may reasonably be required. (4) If, during a company’s business rescue proceedings, the board, or one or more directors of the company, purports to take an action on behalf of the company that requires the approval of the practitioner, that action is void unless approved by the practitioner. (5) At any time during the business rescue proceedings, the practitioner may apply to a court for an order removing a director from office on the grounds that the director has – (a) failed to comply with a requirement of this Chapter; or (b) by act or omission has impeded, or is impeding – (i) the practitioner in the performance of the powers and functions of practitioner; (ii) the management of the company by the practitioner; or (iii) the development or implementation of a business rescue plan in accordance with this Chapter. (6) Subsection (5) is in addition to any right of a person to apply to a court for an order contemplated in section 162.
• s.138 “Qualifications of practitioners” – (1) A person may be appointed as the practitioner of a company only if the person – (a) is a member in good standing of a profession subject to regulation by a regulatory authority prescribed by the Minister in terms of subsection (2); (b) is not subject to an order of probation in terms of section 162(7); (c) would not be disqualified from acting as a director of the company in terms of section 69(8); (d) does not have any other relationship with the company such as would lead a reasonable and informed third party to conclude that the integrity, impartiality or objectivity of that person is compromised by that relationship; and (e) is not related to a person who has a relationship contemplated in paragraph (d);
• s.140 “General powers and duties of practitioner” – (1) During the company’s business rescue proceedings, the practitioner, in addition to any other powers and duties set out in this Chapter – (a) has full management control of the company in substitution for is board and pre-existing management; (b) may delegate any power or function of the practitioner to a person who was part of the board or pre-existing management of the company; (c) may – (i) remove from office any person who forms part of the pre-existing management of the company; and (ii) appoint a person as part of the management of a company, whether to fill a vacancy or not, subject to subsection (2); and (d) is responsible to – (i) develop a business rescue plan to be considered by affected persons, in accordance with Part D of this Chapter, and (ii) implement any business rescue plan that has been adopted in accordance with Part D of this Chapter. (2) Except with the approval of the court on application by the practitioner, a practitioner may not appoint a person as part of the management of the company, or an advisor to the company or to the practitioner, if that person – (a) has any other relationship with the company such as would lead a reasonable and informed third party to conclude that the integrity, impartiality or objectivity of that person is compromised by that relationship; or (b) is related to a person who has a relationship contemplated in paragraph (a). (3) During a company’s business rescue proceedings, the practitioner – (a) is an officer of the court, and must report to the court in accordance with any applicable rules of, or orders made by, the court; (b) has the responsibilities, duties and liabilities of a director of the company, as set out in section 75 to 77; and (c) other than as contemplated in paragraph (b) – (i) is not liable for any act or omission in good faith in the course of the exercise of the powers and performance of the functions of practitioner; but (ii) may be held liable in accordance with any relevant law for the consequences of any act or omission amounting to gross negligence in the exercise of the powers and performance of the functions of practitioner. (4) If the business rescue process concludes with an order placing the company into liquidation, any person who has acted as practitioner during the business rescue process may not be appointed as liquidator of the company.
• s.141 “Investigation of affairs of company” – (1) As soon as practicable after being appointed, a practitioner must investigate the company’s affairs, business, property, and finance situation, and after having done so, consider whether there is any reasonable prospect of the company being rescued. (2) If, at any time during business rescue proceedings, the practitioner concludes that – (a) there is no reasonable prospect for the company to be rescued, the practitioner must – (i) so inform the court, the company, and all affected persons in the prescribed manner; and (ii) apply to the court for an order discontinuing the business rescue proceedings and placing the company into liquidation; (b) there no longer are reasonable grounds to believe that the company is financially distressed, the practitioner so inform the court, the company and all affected persons in the prescribed manner, and – (i) if the business rescue process was confirmed by a court order in terms of section 130, or initiated by an application to the court in terms of section 131, apply to a court for an order terminating the business rescue proceedings; or (ii) otherwise, file a notice of termination of the business rescue proceedings; (c) there is evidence, in the dealings of the company before the business rescue proceedings began, of – (i) voidable transactions, or a failure by the company or any director to perform any material obligation relating to the company, the practitioner must direct the management to take any necessary steps to rectify the matter; (ii) reckless trading, fraud or other contravention of any law relating to the company, the practitioner must – (aa) forward the evidence to the appropriate authority for further investigation and possible prosecution; and (bb) direct the management to take any necessary steps to rectify the matter, including recovering any misappropriated assets of the company. (3) A court to which an application has been made in terms of subsection (2)(a)(ii) may make the order applied for, or any other order that the court considers appropriate in the circumstances.
• s.142 “Directors of company to co-operate with and assist practitioner” – (1) As soon as practicable after business rescue proceedings begin, each director of a company must deliver to the practitioner all books and records that relate to the affairs of the company and are in the director’s possession. (2) Any director of a company who knows where other books and records relating to the company are being kept, must inform the practitioner as to the whereabouts of those books and records. (3) Within five business days after business rescue proceedings begin, or such longer period as the practitioner allows, the directors of the company must provide the practitioner with a statement of affairs containing, at a minimum, particulars of the following: (a) any material transactions involved in the company or the assets of the company, and occurring within 12 months immediately before the business rescue proceedings began; (b) any court, arbitration or administrative proceedings, including enforcement proceedings, involving the company; (c) the assets and liabilities of the company, and its income and disbursements within the immediately preceding 12 months; (d) the number of employees, and any collective agreements or other agreements relating to the rights of employees; (e) any debtors and their obligations to the company; and (f) any creditors and their rights or claims against the company. (4) No person is entitled, as against the practitioner of a company, to retain possession of any books or records of the company, or to claim or enforce a lien over any such books or records.
• s.142(2) Any director of a company who knows where other books and records relating to the company are being kept, must inform the practitioner as to the whereabouts of those books and records.
• s.143 “Remuneration of practitioner” – (1) The practitioner is entitled to charge an amount to the company for the remuneration and expenses of the practitioner in accordance with the tariff prescribed in terms of subsection (6). (2) The practitioner may propose an agreement with the company providing for further remuneration, additional to that in subsection (1), to be calculated on the basis of a contingency related to – (a) the adoption of a business rescue plan at all, or within a particular time, or the inclusion of any particular matter within such a plan; or (b) the attainment of any particular result or combination of results relating to the business rescue proceedings; (3) Subject to subsection (4), an agreement contemplated in subsection (2) is final and binding on the company if it is approved by – (a) the holders of a majority of the creditors’ voting interests, as determined in accordance with section 145(4) to (6) present and voting at a meeting called for the purpose of considering the proposed agreement; and (b) the holders of a majority of the voting rights attached to any shares of the company that entitle the shareholders to a portion of the residual value of the company on winding-up, present and voting at a meeting called for the purpose of considering the proposed agreement. (4) A creditor or shareholder who voted against a proposal contemplated in this section may apply to a court within 10 business days after the date of voting on that proposal, for an order setting aside the agreement on the grounds that – (a) the agreement is not just and equitable; or (b) that the remuneration provided for in the agreement is egregiously unreasonable having regard to the financial circumstances of the company. (5) To the extent that the practitioner’s remuneration and expenses are not fully paid, the practitioner’s claim for those amounts will rank in priority before the claims of all other secured and unsecured creditors. (6) The Minister may make regulations prescribing a tariff of fees and expenses for the purpose of subsection (1).
• s.144 “Rights of employees” – (1) During a company’s business rescue proceedings any employees of the company who are – (a) represented by a registered trade union may exercise any rights set out in this Chapter – (i) collectively through their trade union; and (ii) in accordance with applicable labour law; or b) not represented by a registered trade union may elect to exercise any rights set out in this Chapter either directly, or by proxy through an employee organisation or representative. (2) To the extent that any remuneration, reimbursement for expenses or other amount of money relating to employment became due and payable by a company to an employee at any time before the beginning of the company’s business rescue proceedings, and had not been paid to that employee immediately before the beginning of those proceedings, the employee is a preferred unsecured creditor of the company for the purposes of this Chapter. (3) During a company’s business rescue process, every registered trade union representing any employees of the company, and any employee who is not so represented, is entitled to – (a) notice of each court proceeding, decision, meeting or other relevant event concerning the business rescue proceedings and such notice must be given to employees at their workplace and served at the head office of the relevant trade union; (b) participate in any court proceedings arising during the business rescue proceedings; (c) form a committee of employees’ representatives; (d) be consulted by the practitioner during the development of the business rescue plan, and afforded sufficient opportunity to review any such plan and prepare a submission contemplated in section 152(1)(c); (e)be present and make a submission to the meeting of the holders of voting interests before a vote is taken on any proposed business rescue plan, as contemplated in section 152(1)(c); (f) vote with creditors on a motion to approve a proposed business plan, to the extent that the employee is a creditor, as contemplated in subsection (1); and (g) if the proposed business rescue plan is rejected, to – (i) propose the development of an alternative plan, in the manner contemplated in section 153; or (ii) present an offer to acquire the interests of one or more affected persons, in the manner contemplated in section 153. (4) A medical scheme, or a pension scheme including a provident scheme, for the benefit of the past or present employees of a company is an unsecured creditor of the company for the purposes of this Chapter to the extent of – (a) any amount that was due and payable by the company to the trustees of the scheme at any time before the beginning of the company’s business rescue proceedings, and that had not been paid immediately before the beginning of those proceedings; and (b) in the case of a defined benefit pension scheme, the present value at the commencement of the business rescue proceedings of any unfunded liability under that scheme. (5) The rights set out in this section are in addition to any other rights arising or accruing in terms of any law, contract, collective agreement, shareholding, security or court order.
• s.145 “Participation by creditors” – (1) Each creditor is entitled to – (a) notice of each court proceeding, decision, meeting or other relevant event concerning the business rescue proceedings; (b) participate in any court proceedings arising during the business rescue proceedings; (c) formally participate in a company’s business rescue proceedings to the extent provided for in this Chapter; and (d) informally participate in those proceedings by making proposals for a business rescue plan to the practitioner; (2) In addition to the rights set out in subsection (1), each creditor has – (a) the right to vote to amend, approve or reject a proposed business rescue plan, in the manner contemplated in section 152; and (b) if the proposed business rescue plan is rejected, a further right to – (i) propose the development of an alternative plan, in the manner contemplated in section 153; or (ii) present an offer to acquire the interests of any or all of the other creditors in the manner contemplated in section 135. (3) The creditors of a company are entitled to form a creditors’ committee, and through that committee are entitled to be consulted by the practitioner during the development of the business rescue plan. (4) In respect of any decision contemplated in this Chapter that requires the support of the holders of creditors’ voting interests – (a)a secured or unsecured creditor has a voting interest equal to the value of the amount owed to that creditor by the company; and (b) a concurrent creditor who would be subordinated in a liquidation has a voting interest, as independently and expertly appraised and valued at the request of the practitioner, equal to the amount, if any, that the creditor could reasonably expect to receive in such a liquidation of the company. (5) The practitioner of a company must – (a) determine whether a creditor is independent for the purposes of this Chapter; (b) request a suitably qualified person to independently and expertly apprise and value an interest contemplated in subsection (4)(b); and (c) give a written notice of the determination, or appraisal and valuation, to the person concerned at least 15 business days before the date of the meeting to be convened in terms of section 151. (6) Within five business days after receiving a notice of a determination contemplated in subsection (5), a person may apply to a court to – (a) review the practitioner’s determination that the person is, or is not, an independent creditor; or (b) review, re-appraise and re-value that person’s voting interest, as determined in terms of subsection (5)(b).
• s.146 “Participation by holders of company’s securities” – During a company’s business rescue proceedings, each holder of any issued security of the company is entitled to – (a) Notice of each court proceedings, decision, meeting or other relevant event concerning the business rescue proceedings; (b) Participate in any court proceedings arising during the business rescue proceedings; (c) Formally participate in a company’s business rescue proceedings to the extent provided for in this Chapter; (d) Vote to approve or reject a proposed business rescue plan in the manner contemplated in section 152, if the plan would alter the rights associated with the class of securities held by that person; and (e) If the business rescue plan is rejected, to – (i) propose the development of an alternative plan, in the manner contemplated in section 153; or (ii) present an offer to acquire the interests of any or all of the creditors or other holders of the company’s securities in the manner contemplated in section 153.
• s.147 “First meeting of creditors” – (1) Within 10 business days after being appointed, the practitioner must convene, and preside over, a first meeting of creditors, at which – (a ) the practitioner – (i) must inform the creditors whether the practitioner believes that there is a reasonable prospect of rescuing the company; and (ii) may receive proof of claims by creditors; and (b) the creditors may determine whether or not a committee of creditors should be appointed and, if so, may appoint the members of the committee. (2) The practitioner must give notice of the first meeting of creditors to every creditor of the company whose name and address is known to, or can reasonably be obtained by, the practitioner, setting out the – (a) date, time and place of the meeting; and (b) agenda for the meeting. (3) At any meeting of creditors, other than the meeting contemplated in section 151, a decision supported by the holders of a simple majority of the independent creditors’ voting interests voted on a matter, is the decision of the meeting on that matter.
• s.147(1)(b) the creditors may determine whether or not a committee of creditors should be appointed and, if so, may appoint the members of the committee.
• s.148(1)(b) the employees’ representatives may determine whether or not an employees’ committee should be appointed and, if so, may appoint the members of the committee.
• s.149 “Functions, duties and membership of committees of affected persons” – (1) A committee of employees, or of creditors, appointed in terms of section 147 or 148, respectively – (a) may consult with the practitioner about any matter relating to the business rescue proceedings, but may not direct or instruct the practitioner; (b) may, on behalf of the general body of creditors or employees, respectively, receive and consider reports relating to the business rescue proceedings; and (c) must act independently of the practitioner to ensure fair and unbiased representation of creditors’ or employees’ interests. (2)A person may be a member of a committee of creditors or employees, respectively, only if the person is – (a) an independent creditor, or an employee, of the company; (b) an agent, proxy or attorney of an independent creditor or employee, or other person acting under a general power of attorney; or (c) authorised in writing by an independent creditor or employee to be a member.
• s.150 “Proposed of business rescue plan” – (1) The practitioner, after consulting the creditors, other affected persons, and the management of the company, must prepare a business rescue plan for consideration and possible adoption at a meeting held in terms of section 151. (2) The business rescue plan must contain all the information reasonably required to facilitate affected persons in deciding whether or not to accept or reject the plan, and must be divided into three Parts, as follows; (a) Part A – Background (b) Part B – Proposals (c) Part C – Assumptions and conditions (3) The projected balance sheet and statement required by subsection (2)(c)(iv) – (a) must include a notice of any material assumptions on which the projections are based; and (b) may include alternative projections based on varying assumptions and contingencies. (4) A proposed business rescue plan must conclude with a certificate by the practitioner stating that any – (a) actual information provided appears to be accurate, complete, and up to date; and (b) projections provided are estimates made in good faith on the basis of factual information and assumptions as set out in the statement. (5) The business rescue plan must be published by the company within 25 business days after the date on which the practitioner was appointed, or such longer time as may be allowed by – (a) the court, on application by the company; or (b) the holders of a majority of the creditors’ voting interests.
• s.152 “Consideration of business rescue plan” – (1) At a meeting convened in terms of section 151, the practitioner must – (a) introduce the proposed business rescue plan for consideration by the creditors, and if applicable, by the shareholders; (b) inform the meeting whether the practitioner continues to believe that there is a reasonable prospect of the company being rescued; (c) provide an opportunity for the employees’ representatives to address the meeting; (d) invite discussion, and entertain and conduct a vote, on any motions to – (i) amend the proposed plan, in any manner moved and seconded by holders of creditors’ voting interests, and satisfactory to the practitioner; or (ii) direct the practitioner to adjourn the meeting in order to revise the plan for further consideration; and (e) call for a vote for preliminary approval of the proposed plan, as amended if applicable, unless the meeting has first been adjourned in accordance with paragraph (d)(ii). (2) In a vote called in terms of subsection (1)(e), the proposed business rescue plan will be approved on a preliminary basis if – (a) It was supported by the holders of more than 75% of the creditors’ voting interests that were voted; and (b) the votes in support of the proposed plan included at least 50% of the independent creditors’ voting interests, if nay, that were voted. (3) If a proposed business rescue plan – (a) is not approved on a preliminary basis, as contemplated in subsection (2), the plan is rejected, and may be considered further only in terms of section 153; (b) does not alter the rights of the holders of any class of the company’s securities, approval of that plan on a preliminary basis in terms of subsection (2) constitutes also the final adoption of that plan, subject to satisfaction of any conditions on which that plan is contingent; or (c) does alter the rights of any class of holders of the company’s securities; (4) A business rescue plan that has been adopted is binding on the company, and on each of the creditors of the company and every holder of the company’s securities, whether or not such a person – (a) was present at the meeting; (b) voted in favour of adoption of the plan; or (c) in the case of creditors, had proven their claims against the company. (5) The company, under the direction of the practitioner, must take all necessary steps to – (a) attempt to satisfy any conditions on which the business rescue plan is contingent; and (b) implement the plan as adopted. (6) To the extent necessary to implement an adopted business rescue plan – (a) the practitioner may, in accordance with that plan, determine the consideration for, and issue, any authorised securities of the company, despite section 38 or 40 to the contrary; and (b) if the business rescue plan was approved by the shareholders of the company, as contemplated in subsection (3)(c), the practitioner may amend the company’s Memorandum of Incorporation to authorise, and determine the preferences, rights, limitations and other terms of, any securities that are not otherwise authorised, but are contemplated to be issued in terms of the business rescue plan, despite any provision of section 16, 36 or 37 to the contrary. (7) Except to the extent that an approved business rescue plan provides otherwise, a pre-emptive right of any shareholder of the company, as contemplated in section 39, does not apply with respect to an issue of shares by the company in terms of the business rescue plan. (8) When the business rescue plan has been substantially implemented, the practitioner must file a notice of the substantial implementation of the business rescue plan.
• Regulation 126 “Accreditation of professions and licensing of business rescue practitioners”– (1) (a) The Commission must, when considering an application for accreditation of a profession under section 138(1), have due regard to the qualifications and experience that are set as conditions for membership of any such profession, and the ability of such profession to discipline its members and the Commission may revoke any such accreditation if it has reasonable grounds to believe that the profession is no longer able to properly monitor or discipline its members. (b) Sub-regulation (2) – (8) do not apply to any person who is eligible to be appointed as a business rescue practitioner in terms of section 138 (1) (a). (2) A person may apply to the Commission for a license to serve as a business rescue practitioner, as contemplated in section 138 (1)(b), by filing Form CoR 126.1, together with the fee set out in Table CR 1. (3) When considering an application in terms of sub-regulation (2), the Commission may require the applicant to provide–– (a) further information relevant to the application; or (b) evidence in support of any facts set out in the application. (4) Subject to sub-regulation (5), the Commission may issue a business rescue practitioner’s licence to an applicant if the Commission is satisfied that–– (a) the applicant is of good character and integrity; and (b) the applicant’s education and experience are sufficient to equip the applicant to perform the functions of a business rescue practitioner. (5) The Commission must not issue a license to an applicant who is disqualified from appointment as a practitioner in terms of section 138 (1)(c) or (d). (6) After considering an application, the Commission must either–– (a) issue a license as applied for in Form CoR 126.2; (b) issue a conditional license, on terms that are reasonable having regard to the applicant’s education and experience; or (c) refuse to issue the license, by notice in writing to the applicant, setting out the reasons for the refusal. (7) The Commission, by notice in writing to a licensee–– (a) must revoke the license of a person who, after being licensed, becomes disqualified from appointment as a practitioner in terms of section 138 (1)(c) or (d); and (b) may suspend or revoke a license if the Commission has reasonable grounds to believe that the person is no longer qualified to be licensed, or has contravened the conditions of the license. (8) An applicant whose application has been refused, or who has been issued a conditional license, or a licensee whose license has been suspended or revoked, may apply to the Tribunal to review the Commission’s decision in the matter, and the Tribunal may partially or entirely confirm or set aside the Commission’s decision.
• 127 “Restrictions on practice” – (1) This regulation–– (a) applies to any person who is eligible to be appointed as a business rescue practitioner in terms of section 138 (1) (a) and (b), irrespective of whether that eligibility arises in terms of a license issued by the Commission, or otherwise as contemplated in section 138 (1)(a); and (b) is subject to any more restrictive condition imposed by the Commission in terms of regulation 126 (6)(b), in the case of a licensee contemplated in section 138 (1)(b). (2) For the purposes of this regulation, and in Regulation 128–– (a) “business turnaround practice” means activities of a professional nature engaged in before the effective date, that are comparable to the functions of a business rescue practitioner in terms of the Act; (b) Companies undergoing business rescue proceedings are classified in the following three groups: (i) “large companies”, being any company, other than a state owned company, whose most recent public interest score, as calculated in terms of regulation 26 (2), is 500 or more; (ii) “medium companies” being–– (aa) any public company whose most recent public interest score, as calculated in terms of regulation 26 (2), is less than 500; or (bb) any other company, other than a state owned company, whose most recent public interest score, as calculated in terms of regulation 26 (2), is at least 100 but less than 500; and “small companies” being any company, other than a state owned or public company, whose most recent public interest score, as calculated in terms of regulation 26 (2), is less than 100; and (c) Persons eligible to be appointed as practitioners are classified in the following three groups: (i) “senior practitioner” means a person who is qualified to be appointed as a business rescue practitioner in terms of section 138 (1) and who, immediately before being appointed as practitioner for a particular company, has actively engaged in business turnaround practice before the effective date of the Act, or as a business rescue practitioner in terms of the Act, for a combined period of at least 10 years. (ii) “experienced practitioner” being a person who is qualified to be appointed as a business rescue practitioner in terms of section 138 (1) and who, immediately before being appointed as practitioner for a particular company, has actively engaged in business turnaround practice before the effective date of the Act, or as a business rescue practitioner in terms of the Act, for a combined period of at least 5 years; (iii) “junior practitioner” means a person who is qualified to be appointed as a business rescue practitioner in terms of section 138 (1) and who, immediately before being appointed as practitioner for a particular company, has either–– (aa) not previously engaged in business turnaround practice before the effective date of the Act, or acted as a business rescue practitioner in terms of the Act; or (bb) has actively engaged in business turnaround practice before the effective date of the Act, or as a business rescue practitioner in terms of the Act, for a combined period of less than 5 years. (3) A junior practitioner–– (a) may be appointed as the practitioner for any particular small company; but (b) may not be appointed as the practitioner for any medium or large company, or for a state owned company unless as an assistant to an experienced or senior practitioner. (4) An experienced practitioner–– (a) may be appointed as the practitioner for any particular small or medium company; but (b) may not be appointed as the practitioner for any large company, or for a state owned company unless as an assistant to a senior practitioner. (5) A senior practitioner may be appointed as the practitioner for any company.
• 128 “Tariff of fees for business rescue practitioners” – (1) The basic remuneration of a business rescue practitioner, as contemplated in section 143 (1), to be determined at the time of the appointment of the practitioner by the company, or the court, as the case may be, may not exceed–– (a) R 1250 per hour, to a maximum of R 15 625 per day, (inclusive of VAT) in the case of a small company. (b) R 1500 per hour, to a maximum of R 18 750 per day, (inclusive of VAT) in the case of a medium company; or (c) R 2000 per hour, to a maximum of R 25 000 per day, (inclusive of VAT) in the case of a large company, or a state owned company. (1) Sub-regulation (1) does not apply to, limit or restrict any ‘further remuneration’ for a business rescue practitioner, as contemplated in section 143 (2) to (4). (2) In addition to the remuneration determined in accordance with section 143 (1) to (4), and this regulation, a practitioner is entitled to be reimbursed for the actual cost of any disbursement made by the practitioner, or expenses incurred by the practitioner to the extent reasonably necessary to carry out the practitioner’s functions and facilitate the conduct of the company’s business rescue proceedings.