By Pat Pattinson, TMA-SA COO,
“Business Rescue is not a team sport, nor is it a game played around boardroom tables using PowerPoint presentations or Excel sheets. It is a war, fought at ground level where instructions need to be followed by those being held accountable.” Pat Pattinson
The concept of Business Rescue can no longer be seen as a new addition to the South African legal and even commercial landscape. After more than ten years Business Rescue should be an accepted tool to be used by ailing businesses.
It is thus a shock to the system that during a meeting this week (September 2021) with an attorney, that has been in practice for over 20 years, asked me “what is this business rescue thing”, my client, a creditor, will not take part in this. We will rather institute a separate legal proceeding to collect our debt or liquidate the business.
Now I am not the practitioner in this matter but was simply present as I was appointed by the creditors to act as the independent chair of the Creditors Committee.
I will thus not elaborate on the rest of the meeting, the merits of his statements or the process as a whole, but I was completely dumbfounded with the fact that there was still a single sole left, that was not aware of business rescue. Say what you will about the bigger business rescue cases of businesses such as SAA, but if nothing else, these cases have been broadcasted almost to death throughout all media houses in the country, that it is impossible to have missed. Or is it.
There is no one so deaf as those who do not want to hear.
What is of even greater concern, is the amount of distrust shown towards Business Rescue by those who have “heard of this thing”. I believe that we as the professionals of this industry should educate business owners, entrepreneurs and even the general public about the benefits of business rescue and the rights of not just business owners to make use of business rescue, but also to educate the creditors of affected by business rescue as to their respective rights during the process.
Business Rescue can be a very powerful tool, but it remains simply a tool to be used by entrepreneurs, business owners and even the creditors of a business in rescue. Business owners must first know and understand the concept of business rescue and the benefits of using the right practitioner that will add benefit and credibility to the process, and not simply pick the first one they find on Google.
Creditors must take a leading role in the process and not just judge the process at the end from the comfort of their boardrooms. Creditors have an immense amount of power during the business rescue process including but not limited to the removal of an incompetent or ineffective practitioner. More importantly, the creditors can assist a struggling business in more ways than just writing off debt or providing post-commencement finance.
Another powerful tool in the hands of directors and creditors alike is the ability to unnecessarily lay blame, but to rather hold respective practitioners accountable for their actions.
By way of example, the TMA-SA has a very transparent process to handle any complaints about its members and this process is open to all those affected persons with a valid concern. The only way of improving the process is to actively take part in it.
When you are a creditor affected by a customer submitting itself to business rescue, you must familiarise yourself with the process and actively take part in it. Request that a creditors committee be formed where you can raise concerns absent from the practitioner with other creditors that are in the same boat as yourself. Do not try and instruct, threaten or bully the practitioner, but at the same time, you should not be bullied.
Ask questions, share experiences and if needed employ the services of an independent, credible and experienced person to lead your Creditors Committee.
Be a part of the solution and not just the voice of doom and gloom that’s echo’s from a place of ignorance.