Liquidation Archives - Ashersons Attorneys

05 Jul 2021

Bodies Corporate: Before You Sequestrate to Recover Arrears

One of a Body Corporate’s fundamental duties is to collect monthly levies from the scheme’s members, and to take robust action to recover any arrears. As with any other creditor/debtor relationship however, trying to recover debt can be an exercise in frustration and delay, and the more recalcitrant the debtor, the greater the temptation to “go straight for the jugular” by applying to sequestrate the debtor’s estate. You will have to show that the sequestration is to the advantage of creditors as a whole – not just to you - but that isn’t the only consideration. You will be throwing…

03 Jun 2019

By Ashersons Attorneys

Directors at War and the Liquidation Option – A Tale of Sibling Rivalry

A company’s directors have both the power and the duty to manage the company’s affairs for its benefit. When two or more directors are in place, it’s perhaps natural for the occasional disagreement to arise between them. Indeed, regular expression of a variety of different viewpoints and ideas can make for a strong, dynamic board and business. Provided, that is, that the directors are in the end result still able to agree on the decisions vital to their company’s continued operations. What happens though when disagreements and disputes escalate and make it impossible to continue running the business? Typically, communications…

01 Feb 2019

By Ashersons Attorneys

Proving Your Claim in a Liquidation or Sequestration – When You Should, and When You Shouldn’t

Having to write off bad debt is one thing – having to pay in even more money for the privilege is just adding insult to injury. Yet that is exactly the danger you face if one of your debtors is sequestrated or liquidated (we start off by explaining the different terminology) and you prove your claim without considering the “danger of contribution”. What is that? How does it arise? What if you are a petitioning creditor or hold security for your claim? How can you protect yourself from having to contribute? Read on for the answers… The background You are owed…

02 Feb 2017

By Selwyn Zackon

When Can You Use a Liquidation Application to Collect Debt?

When you are struggling to recover your money from a recalcitrant debtor company, applying for its liquidation can be a very powerful collection tool. Suddenly the directors are faced with the imminent prospect of completely losing control of their company, its business and its assets to a liquidator. If the directors are just fighting a rearguard action to delay paying you, a liquidation (or “winding-up”) application should immediately focus their minds on finding a way to settle the debt. But be warned – this only works with undisputed debt. The recent Supreme Court of Appeal (SCA) case of Freshvest Investments (Pty)…

24 Feb 2016

By Jaryd Kay

Think twice before purchasing an asset from a company in liquidation

Except for the well-seasoned litigator, the average person may perceive the law as inaccessible. However there are times that the court hands down a judgment which sheds light on some core tenets of our legal system. The case of Chater Developments (Pty) Ltd (In Liquidation) and Waterkloof Marina Estates (Pty) Ltd is one such judgment, wherein the court deals with the notion of ultra vires, good faith and simple legislative interpretation. In this particular instance, Chater Developments had been placed into liquidation due to it being unable to satisfy or pay its debts. Initially a single liquidator was appointed to wind…

29 Jun 2015

By Ashersons Attorneys

Business Rescue – Is it too late after liquidation? The Supreme Court of Appeal speaks

An important new SCA (Supreme Court of Appeal) decision recently addressed the following scenario - A close corporation runs a business renting out its commercial properties. The properties are bonded to a bank. The close corporation was placed into final liquidation by the High Court despite contending that it should rather be placed under business rescue. 5 months later it applied again for business rescue, but the High Court concluded that once a final liquidation is granted against a company (the same business rescue provisions apply to close corporations as to companies), it is too late to apply for business…