Approximately 1000 companies go into liquidation per month, but only 45 seeking business rescue, which says to me that new legislation is being overlooked!
Business rescue has suffered criticism, but the focus should be on the successes not the failures. Getting to grips with the practical application of this new and complex legislation has been daunting and exciting, and there is still much to contemplate.
Sadly many business managers tend to consider business rescue as the last resort, when all else has failed when in fact seeking assistance in good time most often results in successful outcomes.
Experience has shown me that six to twelve months is usually needed to effectively roll out a Business Rescue Plan that may result in a better outcome for all parties concerned (stakeholders, management, staff) and a greater return for the company’s creditors or shareholders, than would result from the immediate liquidation of the company.
Another advantage of being under business rescue is that the company cannot be subjected to legal action, and unpaid creditors can be legally prevented from calling for immediate payment. So, my advice – consult a business rescue practitioner if you are in the slightest doubt about where your business is heading – let Business Rescue be a “first resort, not a last resort”!