We are involved in insolvency law on two levels: firstly, we advise clients on all aspects of insolvency and secondly, director Safiyah Ebrahim Cook is a registered insolvency practitioner, who accepts appointments from the Master of the High Court to act as a liquidator or trustee in the winding up of insolvent estates.
ADVISING CLIENTS ON ALL ASPECTS OF INSOLVENCY LAW
When a debtor goes into liquidation or sequestration, it is one of the most challenging obstacles your business will face. Your principal recourse as creditor is to assert priority status over other creditors in the queue where possible, and to apply the strategies available to you under the Insolvency Act to collect your debt.
We are well placed to advise clients on all aspects of insolvency and regularly undertake work and assist clients in the following areas:
- Evaluating the client’s position and establishing the order of preference of the client’s claim (secured, statutory, preferent or concurrent).
- Advise whether the client should lodge a claim against the liquidated debtor or cease collection efforts.
- Drafting and launching winding-up applications of debtors.
- Nomination and appointment of a provisional liquidator to take charge of the debtor’s assets.
- Completion, lodging and proof of claims.
- Collection of the estate assets, including the debtors’ book, in collaboration with the liquidator.
- Providing advice regarding realisation and distribution of the assets.
- Assisting the liquidator in conducting enquiries in terms of section 417 and 418 of the Companies Act read with the Insolvency Act.
- Litigation against directors to hold them personally liable for losses incurred through knowingly carrying on the company’s business recklessly or with the intent to defraud creditors.
INSOLVENCY PRACTICE
Director and insolvency practitioner Safiyah Ebrahim Cook was registered on the National Masters List of Insolvency Practitioners in 2015 and is a practising member of the South African Restructuring and Insolvency Practitioners Association (SARIPA). Safiyah heads our insolvency practice and team, which is operated by qualified, experienced attorneys and assisted by accountants.
How the insolvency process works
When an estate is sequestrated or an enterprise wound-up (whether provisionally or finally), the Master appoints an Insolvency Practitioner who then “steps into the shoes” of the insolvent.
Our main duty as Insolvency Practitioners are to look after the interests of creditors as a whole, also known as the concursus creditorum. This is done by proceeding without delay to recover and take possession of all the assets and property of the insolvent, to apply such assets and property in satisfaction of the claims of creditors and the costs of the winding-up, and to distribute the balance among those creditors who are entitled thereto.
Once appointed, we initially interview the insolvent or the directors/members (in the case of a company/close corporation) and take immediate control of all financial affairs. We secure assets, including any financial and other relevant records and conduct an investigation into the reasons for insolvency.
We investigate and report on the conduct of insolvent person and directors/members in the events leading up to insolvency. The insolvent or directors/members may face further proceedings. We have a duty to expose offences and act thereon. We examine the affairs and transactions of an enterprise before its winding-up in order to ascertain if any of the (past) directors and officers of the enterprise have contravened any provisions of the Companies Act or committed any offence.
We sell the assets of the insolvent person or enterprise who owes money and collect monies due to that person or enterprise from debtors.
We assess and handle creditors’ claims and, finally distribute the monies collected after paying costs in a specific order.