By Jehoshaphat John Njau 7 June 2023
The proverbial “new kid on the block” that is the Companies Act 71 of 2008 has introduced a new lease of life in the form of business rescue proceedings to companies in financial distress aimed at alleviating the pressure brought upon them by creditors demanding payment of the debts owing to them. In doing so, it keeps companies alive and prolongs the benefits enjoyed by the community which a company serves, saves jobs whilst creating a sustainable corporate environment.
However, for the company in financial distress to enjoy the benefits of business rescue it must show that there is a reasonable prospect of the company being rescued.