Constitutional Court strips post-commencement financiers of voting rights in South African business rescue

South Africa’s business rescue framework, established under Section 151 of the Companies Act 71 of 2008, has undergone a significant structural adjustment following a recent Constitutional Court ruling. The decision clarifies the voting rights of post-commencement financiers (PCFs) in the approval of rescue plans, a procedural change with direct implications for the stability of the insolvency market and the handling of large-scale state and private sector distress cases, including South African Airways (SAA) and Vantage Goldfields. The ruling strips PCFs of the right to vote on the adoption of a business rescue plan, a move intended to prevent new debt holders from dictating the outcome to the detriment of…