- A recent landmark judgment in the High Court has made it clear that creditors cannot be compelled to accept a rescue plan that lacks transparency or unfairly benefits one party over others.
- While section 153 of the Companies Act 71 of 2008 empowers the court to set aside a creditor’s vote if the rejection is deemed “inappropriate“, but the court does not merely “rubber stamp” the proposed plan by declaring a dissenting vote as inappropriate, but performs a “single enquiry and value judgment” that balances the reasons for rejection against the likely benefits of liquidation and the overall statutory purpose of business rescue.
- Importantly, the court clarified that the failure of a section 153 application does not…
Insolvency Guardian
Insolvency Services & Bankruptcy Advice
