Consequences of business rescue proceedings

During business rescue proceedings no legal proceedings including enforcement actions against the company or in relation to any property belonging to the company, or lawfully in its possession, may be commenced or proceeded with in any forum without the written consent of the practitioner or with leave of the court or a set off against any claims by the company in any legal proceedings or criminal proceedings against the company or concerning any property or right over which the company exercises the powers of a trustee.

During the rescue proceedings the company may dispose of property in the ordinary course of business and in any bona fide transaction at arms length or in a transaction contemplated and undertaken as part of the implementation of the business rescue plan that has been approved. 

In addition the business rescue proceedings will have an effect on post-commencement finance and the company under rescue may obtain financing and these claims pursuant to the financing will rank preferent. 

There are a number of affects on the employees, contracts and on the shareholders and directors and we will be in a position to advise you on all these matters when consulting with you.