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Companies Act, 2008 (Act No. 71 of 2008)

Chapter 6 : Business Rescue and Compromise with Creditors

Part C : Rights of affected persons during business rescue proceedings

145. Participation by creditors

 

 

1) Each creditor is entitled to—
a) notice of each court proceeding, decision, meeting or other relevant event concerning the business rescue proceedings;
b) participate in any court proceedings arising during the business rescue proceedings;
c) formally participate in a company’s business rescue proceedings to the extent provided for in this Chapter; and
d) informally participate in those proceedings by making proposals for a business rescue plan to the practitioner.

 

2) In addition to the rights set out in subsection (1), each creditor has—
a) the right to vote to amend, approve or reject a proposed business rescue plan, in the manner contemplated in section 152; and
b) if the proposed business rescue plan is rejected, a further right to—
i) propose the development of an alternative plan, in the manner contemplated in section 153; or
ii) present an offer to acquire the interests of any or all of the other creditors in the manner contemplated in section 153.

 

3) The creditors of a company are entitled to form a creditors’ committee, and through that committee are entitled to be consulted by the practitioner during the development of the business rescue plan.

 

4) In respect of any decision contemplated in this Chapter that requires the support of the holders of creditors’ voting interests—
a) a secured or unsecured creditor has a voting interest equal to the value of the amount owed to that creditor by the company; and
b) a concurrent creditor who would be subordinated in a liquidation has a voting interest, as independently and expertly appraised and valued at the request of the practitioner, equal to the amount, if any, that the creditor could reasonably expect to receive in such a liquidation of the company.

 

5) The practitioner of a company must—
a) determine whether a creditor is independent for the purposes of this Chapter;
b) request a suitably qualified person to independently and expertly appraise and value an interest contemplated in subsection (4)(b); and
c) give a written notice of the determination, or appraisal and valuation, to the person concerned at least 15 business days before the date of the meeting to be convened in terms of section 151.

 

6) Within five business days after receiving a notice of a determination contemplated in subsection (5), a person may apply to a court to—
a) review the practitioner’s determination that the person is, or is not, an independent creditor; or
b) review, re-appraise and re-value that person’s voting interest, as determined in terms of subsection (5)(b).