The cost of business rescue
In our previous article we discussed when may one commence with business rescue.
In this article, will discuss the cost involved in business rescue proceedings, particularly, the business rescue practitioner’s remuneration.
The current basic remuneration of a business rescue practitioner, as contemplated in section 143 of the Act is:
• R1 250 per hour, to a maximum of R15 625 per day, (inclusive of VAT) in the case of a small company
• R1 500 per hour, to a maximum of R18 750 per day, (inclusive of VAT) in the case of a medium company; or
• R2 000 per hour, to a maximum of R 25 000 per day, (inclusive of VAT) in the case of a large company, or a state-owned company.
• A practitioner is also entitled to be reimbursed for the actual cost of any disbursement made by him, or expenses incurred by him to the extent reasonably necessary to carry out his functions and facilitate the conduct of the company’s business rescue proceedings.
The main objective of business rescue proceedings is to try to rescue the company instead of it being liquidated. A successful business rescue, either as a restructured continuing business or in the form of a controlled wind down of the affairs of the company, must in all instances be infinitely more preferable than the destructive implications of a liquidation process.
It is an acceptable fact that the liquidator of company will earn far more from the liquidation of a company than what the business rescue practitioner will from the same matter. A successful business rescue, therefore, not only benefits creditors, employees, shareholders and the economy at large, but further avoids the further expense of liquidators’ fees and disbursements.
The competent and skillful business rescue practitioner will only accept an appointment in matters in which he is confident he can achieve a result that would ultimately benefit all affected parties and avoid the liquidation of that company.
Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances
Contact information
Visit BVR at 7 Alcrest Building, on the corner of Mc Adam and Rothery Streets, Mbombela.
