LML4807 assignment 2 semester 1 2024 company law

Question: 1 Coffee Bean Lovers (Pty) Ltd (‘the company’) buys coffee from Kenya and distributes it to different coffee shops in South Africa. Due to an infestation of bugs at one of the coffee plantations, the company will not be able to get deliveries of coffee from Kenya for the next three months. Instead, the company will have to import coffee from Uganda at a much higher cost. As a result, the company’s cash flow will be affected severely. Pat, one of the directors of Coffee Bean Lovers (Pty) Ltd, has informed Jane and Steven, two of the employees of the company, that the company may face serious financial difficulties in the next three to twelve months and that they will not be paid their salaries for the next two months as the company will first have to pay other creditors. Jane and Steven have heard about business rescue, and are of the view that business rescue proceedings may be appropriate in the circumstances to assist the company to survive and to ensure that they will still be paid their salaries. Jane and Steven approach you for advice on business rescue proceedings. With reference to the relevant statutory provisions: 1.1 Explain what business rescue is and indicate the circumstances in which business rescue proceedings may be used. (5) 1.1 Business Rescue Explanation: Business rescue is a legal process designed to facilitate the rehabilitation of financially distressed companies in South Africa. It aims to provide a mechanism for the company to continue operating while addressing its financial difficulties. Business rescue proceedings may be used under the following circumstances:....