The Role of Liquidation Attorneys in Business
In South Africa, financially distressed companies have several ways in which they can resolve their over-indebtedness with the help of Liquidation Attorneys this includes three formal avenues, namely liquidation, business rescue, and compromises under the Companies Act 71 of 2008.
Liquidation, also referred to as winding-up, is a legal process involving the realisation of a company’s assets to cover the costs associated with winding up the company. Any funds which remain after expenses and costs are distributed among the company’s creditors in a prescribed order of preference.
The liquidation of insolvent companies is regulated by the Insolvency Act 24 of 1936 and the Companies Act 61 of 1973. The liquidation of an insolvent company can be initiated by the financially distressed company itself or through legal action brought by the company’s creditors or other concerned parties.
In terms of the Companies Act No 61 of 1973, a company may not keep on trading if it is insolvent. Even where it does not have sufficient assets to ensure all creditors are paid, the company must cease trading and enter business rescue or liquidation. There may be serious consequences for companies and their directors that continue to trade knowing that they are insolvent.
For companies considering liquidation, or whose creditors apply for their liquidation, obtaining the advice and guidance of experienced liquidation attorneys is crucial. The assistance of liquidation attorneys who are experts when it comes to all matters concerning company debt, liquidation, and debt rescue ensures that the correct procedures are followed, and compliance with the relevant legislation is maintained during the winding-up process.
Complex areas of law require specialised knowledge and experience. It is prudent to brief experienced liquidation attorneys for the best outcome. There are many people and organisations who offer advice and assistance to individuals and businesses struggling to service their debt obligations, including debt counsellors and other non-attorneys. They do not have the scope of knowledge and the abilities required to cover all the legal requirements especially if litigation is required.
Experienced Liquidation Attorneys and Litigation
Experienced liquidation attorneys play pivotal roles in helping clients prepare for court appearances, or the negotiation of settlements, and offer legal counsel on the most suitable courses of action. They also aid in the selection and briefing of advocates for cases to be heard in the High Courts.
In the context of insolvency proceedings, there are numerous instances where the involvement of experienced lawyers becomes imperative for achieving the best possible outcome for a client. For instance, tasks like filing rescission applications against default judgment orders may become necessary. Seasoned liquidation attorneys who possess a deep understanding of litigation practices contribute an additional layer of expertise to your legal team and provide a significant advantage.
Understanding the Technical Requirements
Insolvency and liquidation cases, especially in the case of large companies with complex structures may involve large amounts of documentation, legal paperwork, and substantial sums of money. Attention to detail and thorough knowledge of the nuances of the applicable law are vital. Many people may be affected by the outcome of a matter, including shareholders, employees, and creditors. Experienced liquidation attorneys will study and review these documents carefully to ensure that they are accurate and complete and will ensure that all the procedural requirements have been followed to the letter of the law. Any issues or inconsistencies that could impact their clients’ cases will be identified and addressed.
Use Liquidation Attorneys with a Proven Pedigree
Francois Uys Inc. Attorneys are recognised experts in the field of insolvency law and liquidations. Our reputation is built upon superior proficiency, meticulous preparation, and a fearless commitment to our clients’ cases. We will secure you the best possible legal and financial outcome. Our vastly experienced team has over 33 years of experience with insolvency and liquidations and will guide you expertly through the legal formalities while assisting with all the strategic decisions that need to be taken to protect your interests. Call Francois Uys Inc. Attorneys and get the right advice from the start.
Disclaimer: This article is for information purposes only. It does not constitute legal advice and cannot be used to make any decisions. For advice on the topic of insolvency and liquidation contact Francois Uys Inc. Attorneys. The information is relevant as of the date of publishing.
