Business Rescue & Restructuring | June Stacey Marks Attorneys

BUSINESS RESCUE AND RESTRUCTURING

WHEN THE FUTURE OF THE BUSINESS IS AT STAKE

A threatened liquidation. A disputed rescue plan. A funding agreement that will determine whether trading can continue. These are commercial decisions with legal consequences for the company and everyone invested in it.

June Stacey Marks Attorneys advises and represents companies, boards, shareholders, creditors and business-rescue practitioners in business-rescue and restructuring matters. June personally leads the legal strategy and litigation, supported where relevant by the firm’s internal forensic team.

FOR CREDITORS AND INVESTORS

A rescue proposal can materially change the timing and prospects of recovery. We advise on claims, security, voting rights, proposed treatment under a rescue plan and challenges to the process or its implementation. Where post-commencement finance is proposed, we advise on its terms, protections and associated disputes.

The focus is your legal position, the financial assumptions behind the proposal and the practical options available to protect your interests.

FINANCIAL EVIDENCE AND FORENSIC INVESTIGATION

A proposed restructuring must be understood against the company's records. Where suspected misconduct or disputed transactions affect the matter, our internal forensic team supports the investigation. June connects that evidence to the legal issues, the proposed relief and the commercial objective.

FREQUENTLY ASKED QUESTIONS (Q&A)

WHAT IS BUSINESS RESCUE?

Business rescue is a statutory process for a financially distressed company. It involves temporary supervision, a temporary moratorium and a restructuring plan aimed at continued solvent existence or, if that is not possible, a better return for creditors or shareholders than immediate liquidation. It does not guarantee survival.

WHAT IS THE DIFFERENCE BETWEEN BUSINESS RESCUE AND LIQUIDATION?

Liquidation is the end. Business rescue is the fight to avoid it. Where liquidation winds a company down and carves up what's left for creditors, business rescue restructures the debt, the operations, and the obligations — with a practitioner and legal team working to keep the company standing rather than shutting its doors.

CAN CREDITORS STILL SUE MY COMPANY DURING BUSINESS RESCUE?

Business rescue generally restricts proceedings and enforcement against the company, but the moratorium has exceptions. Proceedings may be permitted with the practitioner’s written consent or the court’s leave; other statutory exceptions also apply. The position must be assessed against the particular claim and stage of the proceedings.

HOW LONG DOES BUSINESS RESCUE TAKE?

There's a statutory clock — a rescue plan has to be published within a set period once a practitioner is appointed. But how long the fight actually takes depends on how many creditors are circling and how hard they're willing to push back. Straightforward matters move fast. Contested ones need a legal team ready to go to the High Court when obstruction hits.

WHAT HAPPENS TO DIRECTORS DURING BUSINESS RESCUE?

Directors stay in their seats, but they answer to the practitioner now, and their fiduciary duties don't disappear. Reckless trading or bad-faith decisions before or during the process can expose directors to personal liability — which is exactly why the right legal guidance from day one matters.

WHO APPOINTS THE BUSINESS RESCUE PRACTITIONER, AND WHAT IS THEIR ROLE?

The board can bring in a practitioner voluntarily, or the court can order one in when creditors force the issue. Either way, the practitioner takes the wheel — investigating the company's affairs, building the rescue plan, and balancing the competing interests of creditors, employees, shareholders, and the company itself.

SHOULD I CHOOSE BUSINESS RESCUE OR AN ALTERNATIVE RESTRUCTURING ROUTE?

Not every distressed company needs to go to war with formal business rescue. Sometimes a negotiated debt restructuring or informal creditor deal gets you to the same place, faster and quieter. The right call depends on how bad the distress is and whether creditors are willing to talk — and it's a call worth making with legal advice in hand, before creditors make it for you.

WHAT HAPPENS IF A CREDITOR OR DIRECTOR TRIES TO OBSTRUCT THE RESCUE PROCESS?

It happens — and when it does, paperwork won't save the process. We take it to the High Court: enforcing the moratorium, challenging improper conduct, and compelling cooperation when someone tries to derail the rescue. A practitioner without battle-ready legal support behind them is exposed. We don't let that happen.