Tag: financial distress
Business rescue payment obligations
A landmark high court ruling found that business rescue practitioners can't "have their cake and eat it too". The case involving sugar giant Tongaat Hulett, balances the principles of corporate rescue with the broader societal imperatives of industry regulation.
Voting rights denied for post-commencement creditors – implications
The recent decision by the Gauteng High Court denoting that creditors who have acquired their claim in a business after business rescue has commenced are not entitled to vote on business rescue plans could set a significantly risky precedent for any future organisations facing business rescue.
South Africans are losing financial literacy
In the wake of COVID-19 and the accelerated digitisation of financial services, the gap between South Africans who have highly developed financial literacy and those with little or none has not just widened – it has taken on new dimensions. The consequences for South African society are dire.
Insolvency – the impact of distressed corporates & director apathy
An issue which is of concern to insolvency practitioners across the globe and in South Africa, is the ever increasing level of corporate distress and uncertainty, and which impacts the role of insolvency practitioners (liquidators and business rescue practitioners) and the manner in which they can assist in the restructuring of companies that might be on the brink of insolvency.
“Seismic ruling” – financiers cannot vote on a business rescue plan
Should post-commencement financiers have a vote on business rescue plans? A critical look at Wescoal Mining (Pty) Ltd & Another versus Mkhombo NO & Others (2023-079991) [2023] ZAGPJHC 1097 (2 October 2023). On 2 October 2023 Judge Wilson of the Gauteng Division of the High Court of South Africa endeavoured to ascribe a meaning to the undefined term "creditor" in Chapter 6 of the Companies Act 71 of 2008 (the Companies Act).
An important update regarding the two-pot retirement system
National Treasury and the South African Revenue Service (SARS) provided important feedback at the recent sitting of the Standing Committee on Finance as part of the parliamentary process regarding the much anticipated two-pot retirement system.
Financial crisis! – what are your options?
We are living in a time of economic uncertainty. Inflation is skyrocketing, Eskom is loadshedding, and food prices are the highest they’ve been in 14 years. These conditions are putting a lot of strain on business owners, and some tough decisions regarding the future may need to be made.
Two pots of gold – about the “two-pot” retirement system
The proposed "two pot" retirement system would allow people to have the best of both worlds – early access to a portion of their retirement funds, should it be necessary, while still preserving a significant portion for when they retire. The changes are set to take effect on 1 March 2024, but without further draft legislation being published in February, there are concerns that industry players will not have time to implement changes to meet this deadline.
Blackouts and further tariff hikes point to inevitable financial distress
Rolling blackouts and the recently imposed 18.65% Eskom tariff hikes from April next month are likely to place additional stress on the South African consumer and businesses to the extent that further bankruptcies are inevitable. With the prospect of higher interest rates, low growth and still high inflation, many companies could face corporate failures particularly in the early part of 2023.
Key insurance policies to help navigate unforeseen life events
Given the current high cost of living and uncertain economic environment, being caught off guard by an unforeseen life event may place one in a far worse financial position if no insurance policies are in place to safeguard themselves and their assets.