FREQUENTLY ASKED QUESTIONS (Q&A)
WHAT IS BUSINESS RESCUE?
When creditors close in and the business is on the ropes, business rescue is the legal weapon that buys you time. It places the company under court-recognised protection, throwing up an immediate shield against lawsuits, liquidation applications, and creditor claims — so instead of being torn apart, the business gets a real shot at fighting back.
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?
No. The moment business rescue begins, a legal moratorium locks in — existing lawsuits stop, and new claims and liquidation applications can't move forward without consent from the practitioner or the court. It's immediate protection, not a slow process. That's the whole point.
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.
