Business Rescue ("BR") as a concept was introduced into the South African business environment with the enactment of the 2008 Companies Act ("the Act").
Although this concept is a well-known and utilised practice in the United States of America it is still a new concept in South Africa and is fundamentally different from the previous ineffectual procedure of judicial management.

When it appears that it is reasonably unlikely that a company will be able to pay all its debts as they become due and payable within the immediately ensuing six months, or it appears to be reasonably likely that a company will become insolvent within the immediately ensuing six months then such company is deemed to be financially distressed and can apply for BR.

Judge Splig in the Griessel vs Lizemore case interpreted the definition and spirit of business rescue as contained in the Act clearly and succinctly and takes cognizance of the purpose of the Act. He concluded that it is the primary duty of a BRP to develop and implement a plan to save the company.

A BRP is given extensive authority by the Act to perform this task. To exploit such authority for any reason other than the endeavour to return the business to a sound financial position would in our view constitute an unacceptable practice and not reflect our interpretation of the Act.

Of the total 2148 BR proceedings started over the 5 year period to March 2016, only 83 were for public companies.