Abstract
Business rescue has become more relevant in an ever-changing global economic climate especially when including external factors such as a global pandemic. The idea of business rescue is to restructure business from an insolvent state to a solvent state. This is done by providing companies that are in a temporary insolvent state with breathing room from pouncing creditors to either restructure debt, cash flow or corporate structures through a business rescue plan. Creditors are regarded as ‘affected persons’ in their debtor company’s business rescue proceedings. Their participation rights are set out in section 145 of the Act and creditors’ rights in relation to a business rescue plan in section 152 and 153. In terms of section 152, an adopted business rescue plan is binding also on creditors who did not prove their claims or participate in the proceedings. The Companies Act does not regulate the manner in which claims are to be proven and any disputes about the scope or existence of claims settled. This dissertation analyses the position of creditors who have been excluded and compares it to the regulation of similar situations in the Australian Corporations Act. It argues that reform is necessary in order to address the position of excluded creditors and pay more than lip service to the idea of creditor participation.