services

In this process, an appointed liquidator or trustee takes charge of the estate, collects as many assets as possible, realises some of them at the lowest possible cost and the proceeds are then divided among the creditors in compliance with the distribution rules prescribed by law. Through creditors’ meetings, creditors control the administration process.

In both liquidations and sequestrations, the goal is to fairly distribute assets to creditors and realise some of them to pay outstanding debts in an orderly and regulated manner. These processes are governed by specific laws and regulations in different jurisdictions in order to ensure equitable payment to creditors in insolvency situations.

Interrogation is an investigative procedure which assists the liquidator in obtaining information that will facilitate the tracing and identification of the assets of the insolvent estate in order to realise them and pay creditors. A composition aims to reduce the negative consequences of sequestration for both the insolvent and creditors. It is essentially a contract between the insolvent and creditors. It is akin to a compromise in the case of an insolvent company.

Throughout the advisory process, professionals act in the best interests of their clients. Comprehensive and unwavering support is given throughout the challenging financial distress situations. The ultimate aim is to help clients achieve the most favourable outcomes while responsibly, legally, and ethically resolving their financial difficulties.    This entails professional advice on rehabilitation post-sequestration.

Advisory services are aimed at providing a roadmap for speedy recovery (which may be crystallised in a business rescue plan). These services are typically provided by experts in financial restructuring, business rescue practitioners and/or turnaround management experts, working collaboratively with the financially distressed or debt-laden company’s management team and stakeholders in order to find the most effective solutions to overcome the organisation’s challenges and stave off liquidation. Chapter 6 of the Companies Act (No. 71 of 2008) enunciates the business rescue procedure in South Africa.

Liquidex usually provides these services in conjunction with Sikanye Governance & Corporate Secretaries (Pty) Ltd. There is often a nexus between corporate governance and corporate failure.  Weak board governance is arguably the biggest trigger of financial distress.