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Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)

Chapter 13 : Resolution of Financial Problems

Part 3 : Debt relief and restructuring

152. Application for stay of legal proceedings


(1) If a municipality is unable to meet its financial commitments, it may apply to the High Court for an order to stay, for a period not exceeding 90 days, all legal proceedings, including the execution of legal process, by persons claiming money from the municipality or a municipal entity under the sole control of the municipality.


(2) Notice of an application in terms of subsection (1) must be given to—
(a) the MEC for local government and the MEC for finance in the province;
(b) the Minister;
(c) the Cabinet member responsible for local government;
(e) to the extent that they can reasonably be contacted, all persons to whom the municipality or, the municipal entity owes an amount in excess of a prescribed amount, or if no amount is prescribed, in excess of R100 000.


(3) An application in terms of subsection (1) may for the purposes of section 139(5) of the Constitution be regarded as an admission by the municipality that it is unable to meet its financial commitments.