LML4806 Assignment 2 (ANSWERS) Semester 2 2026 - DISTINCTION GUARANTEED

Comprehensively structured LML4806 Assignment 2 (ANSWERS) Semester 2 2026 - DISTINCTION GUARANTEED. Prepared to a distinction standard with detailed and well-developed responses.. Question: 1 You are the legal advisor of Viljoen Blankets Ltd, a leading supplier of blankets in South Africa. The company has been experiencing cash flow problems due to the significant debts on its balance sheet, which have hampered the company’s ability to invest in working capital sustainably. The company owes R100 million, which it borrowed as loans from various financial institutions. One of the company’s creditors, Touws Bank Ltd, has instituted legal proceedings to recover a secured loan of R75 million from Viljoen Blankets Ltd. The board of directors of Viljoen Blankets Ltd informs you that two retail companies have expressed interest in investing an amount of R120 million in Viljoen Blankets Ltd to assist in the restructuring of its debts and to boost its working capital. The board of directors is of the view that following a restructuring of the company’s debts and investment in its working capital, the company will be able to return to 4 profitability soon. With reference to the Companies Act 71 of 2008, advise the board of directors of Viljoen Blankets Ltd on the following matters: 1.1 The criteria that is used to determine whether a company is financially distressed for purposes of the Companies Act 71 of 2008 and the grounds on which the board may voluntarily place Viljoen Blankets Ltd under business rescue. (5) 1.2 The consequences that business rescue proceedings will have on the loan agreements that Viljoen has with its various creditors and on the legal action that Touws Bank Ltd has already instituted against Viljoen Blankets Ltd. (10) Question: 2 Metro Resources Ltd holds 40% of the issued ordinary shares in Red Hill Ltd, a newly incorporated company. Metro Resources Ltd also holds 100% of the issued ordinary shares in Collieries (Pty) Ltd. Collieries (Pty) Ltd holds 30% of the ordinary shares in Red Hill Ltd. The remaining issued ordinary shares in Red Hill Ltd are held by various institutional and individual shareholders. With reference to the above facts and the Companies Act 71 of 2008, analyse the nature of the legal relationship that exists between Metro Resources Ltd and Red Hill Ltd. (5)