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Most recent Insolvency Law Articles posted
In what a Pretoria News calls a ‘scathing’ attack on the Law Society of the Northern Provinces regarding its failure to act against its former president Ronald Bobroff and his son Darren Bobroff for close to five years, two judges last week ruled that the society had to foot the legal Bill for some of the applications brought before court.
The businessman accused of colluding with Mercantile Bank in alleged illegal asset stripping worth hundreds of millions of rand said he will ‘vigorously defend this action’ as he believes the case ‘is based on unfounded allegations’, says a Fin24 report. Alert Steel is seeking damages of R351m allegedly caused by businessman Rayhaan Hassim, his company West Lake Trade and Investments, and Mercantile Bank following what it believes was an illegal liquidation process in 2014.
Mercantile Bank has been taken to court over allegations it conspired with an alleged fraudster in illegal asset stripping worth hundreds of millions of rands. A Fin24 report says the litigation could not have come at a worse time, as the Portuguese-owned and SA-based bank is up for sale. Alert Steel is seeking damages of R351m caused by alleged ‘mastermind’ Rayhaan Hassim, Mercantile Bank and West Lake Trade and Investments following what it believes was an illegal liquidation process in 2014.
Cash-strapped state-owned airline SA Express is facing an application for liquidation because it cannot pay its debts, says a BusinessLIVE report. The application has been brought in the Gauteng High Court by aircraft leasing company Solenta Aviation on the basis of the non-payment of R87.3m and will be heard on 11 August if it is not opposed. But SA Express acting CEO Victor Xaba said the airline did intend to oppose the application because of a dispute over the amount owed.
The Gupta-owned company Optimum Coal Mine has issued a summons for R10m against a small company. Optimum alleges Re-Action Consulting, which builds public health clinics, has published false and defamatory statements in court papers, says a GroundUp report. Re-Action is litigating to get Optimum wound up for being unable to pay its debts.
Changes to the legal framework and regulation of business rescue, particularly to registration of practitioners, will take effect as from 1 October 2017, says a Fin24 report. Business rescue came into effect via the Companies Act in 2011. ‘Although relatively successful, business rescue has received criticism resulting from apparent flaws in the appointment process and quality of business rescue practitioners.
After driving Optimum Coal into business rescue last year, thereby endangering almost 2 000 jobs at the mine, Eskom suddenly reached a settlement that gave the Gupta family a 75% discount on the R2.1bn fine it had levied on the company at the time it was owned by global commodities trader Glencore. Business Day says in March this year, Eskom agreed to accept a R500m settlement for the non-performance penalties it had levied on Glencore.
A 100% black-owned Port Elizabeth construction company faces liquidation, with the resultant loss of 300 jobs, following claims that the Nelson Mandela Bay Municipality owes it R117m. The Herald reports the Eastern Cape High Court (Port Elizabeth) has provisionally wound up Masakeni Construction (Pty) Ltd, ordering a commission of inquiry in terms of the Companies Act.
Rockwell Diamonds – suspended from trade in Johannesburg and Toronto – has filed for business rescue to stave off attempts by a contractor to liquidate the company, says a BusinessLIVE report. Rockwell had an interim liquidation order awarded against it in March by the Northern Cape High Court (Kimberley) after which it applied for trade in its shares to be suspended.
The Gauteng High Court (Johannesburg) this week placed the estates of personal injury lawyers Ronald and Darren Bobroff under provisional sequestration, according to a report by investigative journalist Tony Beamish on the Moneyweb site. It notes the father and son duo are fugitives from justice who fled to Australia last March when the Hawks requested that they hand themselves over to be arrested.
SARS cannot prevent a liquidator from taking possession of property by virtue of the fact that the duty and VAT of the property has not been paid, says Virusha Subban, Claire van Zuylen and Yue Li, of Bowmans, in an analysis on the Polity site. They examine the recent SCA judgment in CSARS v Van der Merwe NO, where it was held that a liquidator is entitled to take the possession of the property in terms of the Insolvency Act, even though the duty and VAT of the property has not been paid to SARS.
When you are struggling to recover your money from a recalcitrant debtor company, applying for its liquidation can be a very powerful collection tool. Suddenly the directors are faced with the imminent prospect of completely losing control of their company, its business and its assets to a liquidator. If the directors are just fighting a rearguard action to delay paying you, a liquidation (or “winding-up”) application should immediately focus their minds on finding a way to settle the debt.
An allegedly bogus lawyer has been accused of forgery as he attempts to hang onto his houses and cars, avoid sequestration and save his career, says a Sunday Times report. Patel Muhamed, also known as Mohamed Ismail Patel, said in court papers his wife, Fatima, had ‘received her Islamic divorce (from me) according to Sharia law’ through the Majlisush Shura al Islami council in Cape Town.
Entrepreneur and pastor Lonwabo Mahlati is R43m down on his fortune after the Eastern Cape High Court (East London) granted summary judgment against him. Judge John Smith said there seemed little doubt that Mahlati and his wife had misappropriated the money from the business’ liquidation account.
Embattled Western Province Rugby (Pty) Ltd was finally liquidated in the Western Cape High Court on 20 December… but the commercial partner in a major dispute with them has vowed that ‘the fight won’t end here’, notes a Sport24 report. Judge Dennis Davis, on behalf of Judge Ashley Binns-Ward, gave the final liquidation ruling after Binns-Ward reserved judgment. It was ordered that WP Rugby (Pty) Ltd – the business wing of the WP Rugby Union – not proceed with any contracts and that the company’s property be sold by public auction, public tender or private contract.
The SCA has found a racial quota policy implemented for the appointment of liquidators to be unlawful and invalid. It ruled on Friday that an appeal against a finding of its unconstitutionality be ‘dismissed with costs,’ upholding the High Court’s finding of the policy as ‘unconstitutional and irrational’ as well as ‘unlawful and invalid’, notes a News24 report.
What comfort does our law offer to a massively over-indebted person without a job or assets? None, according to Paul Esselaar, consumer law attorney and owner of Esselaar Attorneys. In an article on the Legalbrief Today site he examines the three tools available to over-indebted people: administration orders, debt review and sequestration.
Allegations that Western Province Rugby (WPR) faked bankruptcy for ulterior motives have emerged in an urgent application at the Western Cape High Court which one of its partners lodged last week, says a Weekend Argus report. WPR was provisionally wound up a week ago amid claims that it suffered an operating loss of more than R12m in the 2015 financial year, that its overdraft facility with its bank was as high as R19m and that it was left without funds to cover operating expenses.
Western Cape High Court Judge Robert Henney yesterday granted a final order for the liquidation of the Beyers Realty Group after millions disappeared from the company’s trust account. A Cape Times report says the company had been placed in provisional liquidation on 4 October. Both Beyers Swanepoel-Trollip and his husband and business partner, Lenard Swanepoel-Trollip, who were 50/50 partners in the real estate firm, have absconded and are believed to be in Australia with their 11-month-old daughter.
The Gupta family may lose its recently-acquired Optimum Coal Mine. An eNCA report says multinational company Barloworld Equipment is threatening the mine with liquidation, claiming it is owed money for goods and services. A statement issued by Barloworld Equipment confirms that it has applied to a High Court for the liquidation of Optimum Coal Mine, which the Gupta family recently purchased.