THE GOAL(S) OF CORPORATE RESCUE IN COMPANY LAW: A COMPARATIVE ANALYSIS

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Abstract

The concept of corporate rescue lays emphasis on corporate sustainability than liquidation. This trend in corporate legislation which featured in the United Kingdom Insolvency Act of 1986, Australian Corporations Act 2001, Indian Sick Industrial Companies (Special Provisions) Act of 1985 (as replaced by Companies Act, 2013 and supplanted by the Insolvency and Bankruptcy Code, 2016) has been adopted in the South African Companies Act of 2008. The goal(s) of corporate rescue in some of these jurisdictions are not clearly defined. The paper examines, through a comparative analysis, the relevant statutory provisions in the United Kingdom, India, Australia and South Africa and the attendant judicial interpretations of those provisions with a view to discovering the goal(s) of corporate rescue in those jurisdictions. It is argued that while under the United Kingdom and Australian statutory provisions, the administrator could pursue alternative goals of either rescuing the company or achieving better results for the creditors; the South African and Indian statutory provisions do not provide such alternatives. The seeming ancillary purpose of crafting a fair deal for the stakeholders under the South African Companies Act’s provision is not sustainable if the company as an entity cannot be rescued.

Keywords: Company, Corporate Rescue, Goals, Directors, Stakeholders, Statute, Courts

Received: 01.02.2017

Accepted: 14.08.2017

How to cite this paper: Nwafor, A. O. (2017). The goal(s) of corporate rescue in company law: A comparative analysis. Corporate Board: role, duties and composition, 13(2), 20-31. https://doi.org/10.22495/cbv13i2art2