The Barbrook and Lily mines entered business rescue in 2016 after three workers died in an underground pillar collapse. A decade of litigation followed, and in all that time the remains of those workers have not been recovered. Workers went unpaid until a new buyer, Lions Bay Resources, agreed to take over. In November 2024, ActionSA made a formal offer to retrieve the bodies and has kept pressure on government to address the tragedy. That is what a stalled business rescue looks like when the people counting on it are not directors or lenders but workers, families and communities.
Business rescue is meant to be a safety net for companies in distress. When it drags, ordinary people feel it most. The process, provided for in the Companies Act 71 of 2008 and effective from 2011, aims at the rehabilitation of a financially distressed company. It grants a company grace on its debts, allows new funders to come in with support, and places an independent practitioner in charge. It can end in recovery or in surrender. The idea is to give a struggling company options before bankruptcy, and South Africa is not alone in this: the UK has its own restructuring plans, Canada has the Companies’ Creditors Arrangement Act, and France, Germany and Japan each have their own versions.
The stakes for the public sharpened recently when the Constitutional Court clarified who has a say in rescue plans. Before the ruling, the high court and the Supreme Court of Appeal had taken opposing views on post-commencement creditors, the people who agree to loan a company money after it enters rescue. In early October, the final ruling came down: this type of creditor will not have the right to vote on adopting the plan.
Eric Levenstein, head of insolvency and business rescue at Werksmans Attorneys, explained the court’s reasoning. A plan needs to be built around a defined body of creditors, the pre-commencement creditors who were owed money when the company entered rescue. In his view, that creates certainty and predictability and adds to the efficient administration of rescue proceedings going forward.
Koos Benadie, director of insolvency, business rescue and restructuring at Barnard Incorporated Attorneys, whose firm became involved in the Vantage Goldfields case in 2024, holds a similar view. Post-commencement financiers, he said, already have advantages through the preference and security they can arrange, so they do not have a place at the table at the Section 151 meetings where the plan is voted on. He noted a consequence worth watching: essentially all plans approved in the past three years, where post-commencement financing creditors had a vote, could be reviewed or reopened, because that could have affected the process and the voting. He does not necessarily expect that outcome, though he called it a real possibility that will be tested in the near future.
Opinion is divided. Some practitioners see the ruling as sound, saying voting should rest with the affected persons. Others worry it might deter post-commencement financiers from getting involved at all, since they will have no vote in the outcome. Benadie sees enough scope for the process to develop without harming those financiers, but he points to the risk of a financier coming in and dictating or even taking over the rescue, leaving the original affected persons with their fate in someone else’s hands. He does not view the ruling as negative or the end of business rescue. Levenstein imagines creditors laying down clear terms before lending, specifying interest and repayment, and banks offloading non-performing loans to third parties who might then provide further post-commencement financing. He does not expect a massive pushback on the amount of such financing available, though he conceded time will tell.
Meanwhile, the process itself is contested. Benadie acknowledged that business rescue has had a bad reputation for delaying the inevitable, with insolvent companies stripping assets, but he believes the regulation and its direction make it a good process, provided the right candidate is identified. He also flagged a stigma that practitioners exist to protect shareholders and directors, which makes financiers approach with a negative attitude. Julian Jones, a partner at Webber Wentzel Attorneys, was blunter: business rescue is not there to save all companies, some cannot be saved, and liquidation remains a valuable tool. In his experience, three or four out of every ten rescues he sees should not be there and are simply delaying the inevitable. Levenstein added that companies should speak to advisers earlier, because leaving it too late generally means the plan will not be approved or succeed.
State-linked companies with essential public duties, such as South African Airways and the South African Post Office, are good theoretical candidates, said Benadie, though SAA’s size and complexity exposed a shortcoming: the process envisaged completion within three months, which was never realistic given the number of creditors involved. The balance, he said, lies between an achievable time frame and avoiding the trap of protecting a terminally ill business.
Industry voices add another caution. Blacky Komani, chair of FlySafair and former CEO of 1Time, the low-cost airline that entered liquidation in 2012, said rescue may not suit air carriers. Passengers book closer to their travel dates, squeezing cash flow, creditors demand upfront payment, lessors demand bigger guarantees, and a vicious cycle forms while practitioners still collect their fees. He also sees room to build trust between practitioners and management, and stressed that honest communication with staff, unions and creditors is what keeps the team together.
The process is not going anywhere, in Levenstein’s view, particularly as companies weigh cost pressures tied to the US war with Iran. Allianz forecasts global insolvencies rising 5% in 2026 and a further 1% in 2027, after a 6% rise in 2025, marking five consecutive years of increases. In that climate, the country needs a rescue process that rewards efficiency and sound decisions, for the companies and for the workers and communities who rely on them. On the Vantage Goldfields matter, Benadie said he hopes matters can be finalised in the next couple of months.