# Business rescue: lifeline or delay tactic? > A Constitutional Court ruling clarifies South Africa's business rescue framework, but debate continues over whether it truly saves companies or just postpones failure. - Title: Business rescue: lifeline or delay tactic? · Daily Maverick - Summary: A Constitutional Court ruling clarifies South Africa's business rescue framework, but debate continues over whether it truly saves companies or just… - Keywords: business rescue, south africa, constitutional court, financial distress, insolvency, saa, restructuring, creditors, liquidation, corporate debt, news, politics - Source: Daily Maverick — https://dailymaverick.co.za/article/2026-11-03-business-rescue-lifeline-or-delay-tactic-for-struggling-companies - Author: Holly Munks - Published: 2026-11-03T05:04:42+00:00 - Read time: 3 min - Topics: business rescue, south africa, constitutional court, financial distress, insolvency, saa, restructuring, creditors, liquidation, corporate debt, news, politics ## What is business rescue? Business rescue, under South Africa's Companies Act 71 of 2008, targets rehabilitation of financially distressed companies. ## Not unique to South Africa The UK has restructuring plans, Canada has the Companies' Creditors Arrangement Act, and France, Germany and Japan have their own versions of business rescue frameworks. ## The case for business rescue Koos Benadie, director of insolvency at Barnard Incorporated Attorneys, says business rescue is a good process when done right. > The business rescue process has had a bad reputation in the past for delaying the inevitable, where companies are insolvent, and they try to delay the process and strip assets. But if you look at the regulation and where it's going, I think it's a good process. ## The case against business rescue Julian Jones, partner at Webber Wentzel Attorneys, says some companies cannot be saved and business rescue is sometimes abused. > Some companies can't be saved, and the liquidation process is still a valuable tool. Sometimes business rescue is abused. ## Timing matters Eric Levenstein, head of insolvency at Werksmans Attorneys, says companies should speak to business rescue advisers at an earlier stage. > If you leave it too late, generally the plan won't be approved or it won't be successful. ## The practitioner problem Benadie says one stigma is that practitioners are seen as protecting shareholders and directors, making financiers approach rescue with negative attitudes. > one of the stigmas behind business rescue is that the business rescue practitioner is there to protect the shareholders and directors of the company. ## SAA's three-month problem South African Airways is a theoretical candidate for business rescue, but its size and complexity made things tricky. > One of the shortcomings in the business rescue process … is that they envisaged that a business rescue would be completed within three months. ## Airlines face unique challenges Blacky Komani, chair of FlySafair and former CEO of 1Time, says business rescue may not suit airlines. ## Creditor demands worsen the crisis Komani explains that creditors demand upfront payment on cash the airline does not have.Without a credit line, lessors ask for increased guarantees, and the situation worsens daily while business rescue practitioners still collect their fees. > The second thing is that creditors want you to pay up front on the cash that you don't have. ## Trust between practitioners and management Komani sees room for improvement in trust between business rescue practitioners and companies. Practitioners who assume management is incompetent waste time reinventing the wheel, when honest communication and visible leadership could keep the team together. > Not everyone is a bad person… There are people within the organisation that want to save the company. ## Constitutional Court rules on creditor voting The Constitutional Court ruled in early October that post-commencement creditors, who loan money after a company enters rescue, will not have the right to vote on adopting the business rescue plan. ## Why exclude post-commencement creditors? Eric Levenstein explains the court wanted to build rescue plans around a defined body of pre-commencement creditors, those owed money when the company entered rescue. > It creates certainty, predictability and I think adds to the efficient administration of rescue proceedings going forward. ## The ruling's potential impact Benadie notes that all plans approved in the past three years where post-commencement creditors had a vote could potentially be reviewed or reopened, as this could have impacted the rescue process and voting. ## Divided views on the ruling Some practitioners see the ruling as good, with voting relying on affected persons.Others worry it might deter post-commencement financiers from getting involved, as they will not have a vote. ## The human cost of delay Vantage Goldfields' Barbrook and Lily mines entered business rescue in 2016 after three workers died in an underground pillar collapse. ## Rising insolvencies ahead Business rescue is not going anywhere as companies face cost pressures. Allianz forecasts global insolvencies will rise five percent in two thousand twenty-six and a further one percent in two thousand twenty-seven, after rising six… ## Key takeaway South Africa's Constitutional Court ruled that post-commencement creditors cannot vote on business rescue plans, aiming to create certainty, but experts remain divided on whether the process genuinely rescues struggling companies or delays inevitable collapse.