FROM JUDICIAL MANAGEMENT TO BUSINESS RESCUE: A CRITICAL ANALYSIS OF THE MEANING AND PURPOSE OF BUSINESS RESCUE IN SOUTH AFRICA SINCE 1926

Abstract

When the concept of “corporate rescue” was introduced in the form of judicial management in South African company law in 1926, it was unique. By the start of the twentieth century, it had become clear that companies were not only major contributors to the economy, but also major employers. It was obviously desirable that companies with economic potential should not be wound up and liquidated if they encountered financial difficulties that could, potentially, be overcome relatively quickly with a return to solvency and viability. That goal, stated in these broad terms, concealed many arising difficulties – one of them being how to determine whether a struggling company had the potential to return to solvency? This and many other difficulties have led to the evolution of corporate rescue since its introduction. Appraising the corporate rescue culture in South Africa is therefore an opportunity to advance knowledge within the area of corporate law and to contribute to the understanding of how business rescue has developed in both theory and practice.