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LML4806 Assignment 2 Semester 2 2024
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LML4806 Assignment 2 Semester 2 2024 QUESTIONS WITH ANSWERS
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LML4806 Assignment2 Semester 2 2024
QUESTIONS AND ANSWERS
[DATE]
[COMPANY NAME]
[Company address]
, LML4806 Assignment 2 (COMPLETE ANSWERS) 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 a business rescue practitioner, has the option to apply to the court to set
aside the vote of Winelands Packers (Pty) Ltd against the adoption of the business
rescue plan. The Companies Act 71 of 2008 and relevant case law provide
guidance on the circumstances under which such an application can be made.
Legal Framework and Grounds for Application
Section 153 of the Companies Act 71 of 2008:
1. Section 153(1)(a)(ii) of the Companies Act allows a business rescue
practitioner to apply to the court to set aside a vote on a business rescue plan
if the vote was inappropriate.
2. The court may set aside the vote if it finds that the vote was:
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