Financial distress article in De Rebus

on Wednesday, 01 May 2013. Posted in Media Publications

Financial distress article in De Rebus

It is trite that the ultimate fate of a financially distressed company that is unable to pay its creditors is liquidation. Once in liquidation, and should creditors elect to proceed with an insolvency inquiry, the directors of the company might, in appropriate circumstances, be faced with uncomfortable questions, such as:

  • Why did the board not inform the stakeholders and creditors timeously that the company was financially distressed?
  • Why did the board not resolve to place the company under business rescue?