Business rescue law being abused, say creditors

The companies committing the alleged abuse are said to be trying to prevent foreclosure of overdraft facilities or loans.

According to the Business Live article, Eric Levenstein, director at Werksmans Attorneys, says that for many companies, business rescue was nothing more than an attempt by the company to delay its ultimate demise, when clearly it could not pay its debts to creditors.

"Many South African financial institutions are met with resolutions for business rescue when proceeding against debtors, Levenstein is quoted as saying. "Once business rescue proceedings begin there is no opportunity for creditors to legally pursue claims against debtors."

For more:

• Business Live: Business rescue law being abused, say creditors