A business rescue plan consists of several sections of relevant information. Here, we will outline the 3 main sections of the plan, and who the information is relevant to. We will also expand on its purpose, contents, and effects on the relevant parties.

Three Sections of the Rescue Plan

Using the plan, affected persons must be able to make an informed decision when approving it. The plan consists of three sections: Part A – Background; Part B – Proposals; and Part C – Assumptions and Conditions.

Part A of Plan – Background

This section of the business rescue plan must include the following information:

A business rescue plan includes three sections of information relative to the business. They include the Background, Proposals, as well as Assumptions and Conditions.

• A complete list of every material asset under the company’s ownership.
• Information indicating which creditors hold which assets as security upon beginning the rescue.
• A complete list of the company’s creditors when the rescue process began. This must be statutory preferent, and in recognition of the laws of insolvency.
• Information indicating the exact creditors that have proven their claims against the business.
• The probable dividend that the creditors would receive.
• A complete list of the company’s issued securities holder.
• A copy of the written agreement indicating the rescue practitioner’s renumeration.
• A statement of whether the plan includes an informal proposal by a creditor of the company.

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The Rescue Plan is crucial to all involved parties. It provides and outline of business activities moving forward, as well as much more.

Part B of Plan – Proposals

This section of the business rescue plan should include the following at the very least.

• The reason for, and duration of, any suspension of the rescue process. This relates to suspensions as provisioned by the rescue plan.
• The amount of debt released from the company. Also the extent of proposed debt that will convert to equity within the business.
• The ongoing role of the company during the rescue process.
• How the treatment of existing agreements in the company changes.
• The property of the company available to pay creditors claims, as agreed in the rescue plan.
• The order in which proceeds of liquidated property will pay business creditors. This assumes the adoption of the rescue plan.
• The benefits of implementing the rescue plan. This is then compared to creditor benefits received upon company liquidation.
• The effect of the rescue plan on the company’s issued securities’ holders.

Part C of Plan – Assumptions and Conditions

This section of the business rescue plan must include the following information:

• A statement of prerequisites to fulfill for the rescue plan to properly begin. There are also prerequisites to fulfull for full implementation of the business plan.
• The effect that the number of employees will have on the rescue process. Also the effect that their terms and conditions of emplyment will have on the rescue process.
• The prerequisites, or circumstances, under which the rescue process will conclude.
• An estimated balance sheet for the company. Accompanying this will be a record of cash flow for the following 36 months. Various assumptions and contingencies must go with these documents, as well.
• The above records assume the implementation of the rescue plan.
• The rescue plan concludes with the admittance of a certificate by the practitioner. The certificate affirms the accuracy and completeness of the information gathered.

We are Corporate Business Rescue. As an organisation we provide business rescue services to companies in financial distress. Our aim is to assist businesses in avoiding liquidation, while repaying creditors to the business.

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