Company Law
LML4806
Semester 2 Assignment 2 – 2024
100%
, Question 1
Barbara may potentially apply to a court to set aside the vote of Winelands
Packers (Pty) Ltd under certain circumstances as provided for in the
Companies Act 71 of 2008. The relevant section of the Companies Act that
deals with this scenario is Section 152 (8), which allows for the court to set
aside a vote if it is satisfied that the vote unfairly prejudices or unfairly
disregards the interests of any creditor or class of creditors.
In this case, Winelands Packers (Pty) Ltd, a secured creditor holding 27% of
the creditors' voting interests, voted against the adoption of the business
rescue plan despite the majority of other creditors being in favor of it. If
Barbara can demonstrate to the court that Winelands Packers' vote unfairly
prejudices the interests of the other creditors, the employees, and the
successful rescue of Thirsty Elephants (Pty) Ltd, she may have grounds to
apply for the vote to be set aside.
When considering such an application, the court will take into account
various factors including:
1. Whether the vote unfairly prejudices or disregards the interests of any
creditor or class of creditors.
2. The impact of setting aside the vote on the successful implementation of
the business rescue plan.
3. The overall fairness and reasonableness of the vote in the context of the
business rescue proceedings.
4. The potential consequences of allowing the vote to stand on the affected
parties.
If the court decides to set aside Winelands Packers (Pty) Ltd's vote, the effect
would be that their vote would not be counted in the final decision on the
adoption of the business rescue plan. This could potentially change the
outcome of the vote and allow for the adoption of the plan if the remaining
votes still constitute a majority in favor.
It is important for Barbara to gather evidence and present a strong case to the
court demonstrating how Winelands Packers' vote unfairly prejudices the
interests of other creditors and the successful rescue of Thirsty Elephants
LML4806
Semester 2 Assignment 2 – 2024
100%
, Question 1
Barbara may potentially apply to a court to set aside the vote of Winelands
Packers (Pty) Ltd under certain circumstances as provided for in the
Companies Act 71 of 2008. The relevant section of the Companies Act that
deals with this scenario is Section 152 (8), which allows for the court to set
aside a vote if it is satisfied that the vote unfairly prejudices or unfairly
disregards the interests of any creditor or class of creditors.
In this case, Winelands Packers (Pty) Ltd, a secured creditor holding 27% of
the creditors' voting interests, voted against the adoption of the business
rescue plan despite the majority of other creditors being in favor of it. If
Barbara can demonstrate to the court that Winelands Packers' vote unfairly
prejudices the interests of the other creditors, the employees, and the
successful rescue of Thirsty Elephants (Pty) Ltd, she may have grounds to
apply for the vote to be set aside.
When considering such an application, the court will take into account
various factors including:
1. Whether the vote unfairly prejudices or disregards the interests of any
creditor or class of creditors.
2. The impact of setting aside the vote on the successful implementation of
the business rescue plan.
3. The overall fairness and reasonableness of the vote in the context of the
business rescue proceedings.
4. The potential consequences of allowing the vote to stand on the affected
parties.
If the court decides to set aside Winelands Packers (Pty) Ltd's vote, the effect
would be that their vote would not be counted in the final decision on the
adoption of the business rescue plan. This could potentially change the
outcome of the vote and allow for the adoption of the plan if the remaining
votes still constitute a majority in favor.
It is important for Barbara to gather evidence and present a strong case to the
court demonstrating how Winelands Packers' vote unfairly prejudices the
interests of other creditors and the successful rescue of Thirsty Elephants
