COMPROMISES, COMPOSITIONS AND SCHEMES OF ARRANGEMENT

Compromises, Compositions and Schemes of Arrangements are all processes available in terms of the Companies Act and Close Corporations Act which provides for alternatives to traditional Liquidations and Business Rescue procedures. These tools provide for a regulated process whereby consultations take place with companies, shareholders, creditors and holders of security in order to rearrange the debt obligations of the company.

The aim of these tools are to provide for an arrangement whereby stakeholders could receive a better dividend than they would have received through a Liquidation or Business Rescue and still providing an opportunity for the business to continue trading.

Each one of these tools has its own procedure that can be followed. These procedures are also open to a company that has already been placed into liquidation and is not necessarily aimed at corporate entities that are in financial distress.

As this is a highly specialised and technical field it is advisable that you consult with one of our experts to establish whether your business is eligible for one of these procedures.