Business rescue is still relatively new to SA with direction being sought from the courts on a regular basis. Be cautious of both the entrepreneurial client who believes everything will be hunky-dory tomorrow as well as the opportunistic Business Rescue Practitioner (BRP) trawling the corporate landscape who may have limited rescue and turnaround experience.

A successful business rescue is one that provides a better return to creditors than a liquidation dividend would, whether through business turnaround or a controlled wind-down of the business. Can this be achieved? If there is still a market for the company’s product and the company has the ability to deliver to market at the right price and appropriate quality, then there is probably a business worth saving. Alternatively, if assets are owned which should fetch a better price if sold over a period of time rather than in a fire-sale, then a wind-down in rescue should be considered.

And how to respond to the overly confident entrepreneur - do a reality check as “hope is not a plan”.

And the opportunistic BRP - is he or she savvy in business and a person who can be trusted? Good accountants, lawyers and insolvency practitioners do not necessarily make good BRP’s. Rescue involves a deep understanding of how businesses operate; from the identification, or indeed creation of a market, to the successful delivery to market, with the main goal of turning productive efforts into cash.

Fortunately, the law favours the BRP, provided they are able to come up with a rescue plan that is realistic and achievable and in so doing, garner the trust and support of the majority of the creditors.