Shareholders’ rights during Business Rescue proceedings
What rights do the shareholders of a company in business rescue have when the process formally commences? Schindlers Attorneys explains what happend before and during a turnaround process.
Business rescue is regulated by Chapter 6 of the Companies Act 71 of 2008 (the “Act”) with the aim to facilitate the rehabilitation of a company from what the Act defines as being financially distressed, as an alternative to liquidation, for a better return for the company’s creditors or shareholders. In terms of Section 7, one of the purposes of the Act is to “provide for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders”.