Insolvency means the inability of a company to pay off its debts, and this is defined in two different ways: cash flow insolvency where the business is unable to pay debts as they fall due and balance sheet insolvency where the business has negative net assets, or rather, their liabilities exceed their assets. Insolvency, however, is not a synonym for bankruptcy.
The recent changes in the South African regulatory environment and the increasing complexity of corporate and financial structures have awakened business leaders to the risk of insolvency and the urgent need to react to this proactively. ENSafrica (Edward Nathan Sonnenbergs) assists clients in proactively managing insolvency and financial exposure. However, when insolvency is inevitable, the strategy becomes one of minimising loss, maximising returns for creditors, and developing and implementing a recovery strategy for the viable business activities.
Insolvency regimes around the world have evolved in very different ways, with laws focusing on different strategies for dealing with the insolvent corporate. The outcome of an insolvent restructuring can be very different depending on the laws of the country in which the insolvency proceeding is run, and in many cases different stakeholders in a company may hold the advantage in different jurisdictions.
Debt restructuring is increasingly becoming a global reality given the economic downturn that has been felt by all. ENSafrica’s team of debt restructuring experts have extensive experience in insolvency and restructuring and, if possible, this is usually a less expensive and more attractive alternative to ailing companies wanting to avoid bankruptcy. By restructuring, that is remodelling the financial and organisational structure of the businesses’ debtors resulting in the rehabilitation and subsequent liquidity of the business, the continuation of the company is ensured. This is also known as business rescue, turnaround or recovery.
Our full-service offering means clients are able to find the most appropriate and cost-effective solution by having access to all business areas of the firm, ensuring timely solutions to what is often a stressful procedure.
Speciality services include:
- Viability assessments
- Risk management
- Debt restructuring and securitisation
- Debt recovery
- Recovery strategy
- Business reconstruction
- Forensic investigations
- Employee fraud
- Insolvency litigation and constitutional law
Our liquidation team handles a wide range of insolvency matters, including but not limited to:
- The liquidation of companies and close corporations
- The sequestration of individuals and partnerships
- Negotiating and drafting of schemes of arrangement in terms of the Companies Act
- Commissions of inquiry
- Preparation of claims
- Court applications for liquidators for leave to borrow monies and sell assets