Does the role of a business rescue practitioner necessitate the imposition of fiduciary duties and liabilities to the same degree as directors of a company?

Abstract

Business rescue practice is a legislative mechanism in terms of Chapter 6 of the Companies Act 71 of 2008 (“the Act”), aimed at rehabilitating failing companies. Business rescue proceedings (“proceedings”) are defined as the ‘[facilitation of the] rehabilitation of a company that is financially distressed’.1 This is achieved through the temporary supervision of the company by the business rescue practitioner (“practitioner”), as well as a temporary moratorium on the rights of claimants. The goals of business rescue proceedings are to either rehabilitate the company to operate on a solvent basis, or to secure a better return for creditors upon the company’s liquidation.2 The ultimate manner of rehabilitation of a company is set out in the business rescue plan drafted by the practitioner and voted on by affected parties3 as envisaged in the Act