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LML4806 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024
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LML4806 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024 QUESTIONS AND ANSWERS
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[Date]LML4806 Assignment
2 Semester 2 2024
QUESTIONS AND ANSWERS
, LML4806 Assignment 2 Semester 2 2024
Question:
1 Barbara is a business rescue practitioner of Thirsty Elephants (Pty) Ltd, a
company that is under business rescue. She convenes a meeting of the creditors of
Thirsty Elephants (Pty) Ltd to discuss and vote on the business rescue plan. The
business rescue plan contains ample provisions that protect the interests of the
secured creditors of Thirsty Elephants (Pty) Ltd. Winelands Packers (Pty) Ltd, a
secured creditor of Thirsty Elephants (Pty) Ltd holding 27% of the creditors’
voting interests that are voted at the meeting, votes against the adoption of the
business rescue plan. All the other secured and unsecured creditors in attendance at
the meeting vote for the adoption of the business rescue plan as the plan presents
certain advantages to them. Barbara is concerned that Winelands Packers (Pty)
Ltd’s vote against the adoption of the 4 business rescue plan is detrimental to the
successful rescue of Thirsty Elephants (Pty) Ltd, the interests of its employees and
the interests of the other affected creditors. With reference to the Companies Act
71 of 2008 and the relevant case law, advise Barbara on whether she may
successfully apply to a court to set aside the vote of Winelands Packers (Pty) Ltd.
In your advice, you should discuss the grounds on which such an application may
be made, the factors that the court should take into account when considering such
an application and the effect of a court setting aside Winelands Packers (Pty) Ltd’s
vote. (10)
Barbara, as the business rescue practitioner, has a pivotal role in the business
rescue process and must ensure that the rescue plan is in the best interests of the
company and its stakeholders. Given that Winelands Packers (Pty) Ltd, a secured
creditor with significant voting interest, has voted against the business rescue plan,
you need to consider whether you can approach the court to set aside this vote.
Relevant Provisions of the Companies Act 71 of 2008:
1. Section 152(1)(e): This section allows for the business rescue plan to be
approved by a simple majority of creditors' voting interests.
2. Section 152(3)(c): If the business rescue plan is rejected, the business rescue
practitioner may apply to court to set aside the vote on the grounds that it
was inappropriate.
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