Business rescue replacing judicial management: An assessment of the extent of problems solved

Abstract

The South African Companies Act 46 of 1926 introduced judicial management as a statutory corporate rescue procedure for companies to be used before liquidation, where appropriate. It was retained in the South African Companies Act 61 of 1973, even though the Master of the then Supreme Court recommended its abolishment. Several studies identified different problems and deficiencies and advocated reform, either in the form of a change in current judicial management legislation or through completely new legislation. The Department of Trade and Industry therefore issued a guideline for corporate reform in 2004 in which it proposed a debtor-friendly business rescue regime to replace the creditor-friendly judicial management regime. The ensuing Companies Bill detailing the business rescue provisions was issued in 2007.