Stakeholder expectations of the Business Rescue Plan from a South African perspective

Rosslyn-Smith, Wesley; Pretorius, Marius

doi:10.4102/sajesbm.v7i1.4

Cited by 11 publications

(16 citation statements)

References 12 publications

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“…Another entrepreneur learned that creditors, especially the banks, are concerned whether the management team can be trusted. The learnings related to the expectations of the business plan echoes the findings of Pretorius and Rosslyn-Smith (2015) who examined expectations of the reorganisation plans of four prominent regimes. They reported that the plan was found to serve as a tool for feasibility declaration, a medium of communication, an enabler of transparency, a contractual obligation and finally to assist decision-making for attracting post-commencement finances.…”

Section: Process Learningsmentioning

confidence: 64%

“…Creditor communication primarily takes place in the form of creditors' meetings and notices. In the examination of the reorganisation plans of four prominent regimes, Pretorius and Rosslyn-Smith (2015) found that the plan serves as a tool for feasibility declaration, a medium of communication, an enabler of transparency, a contractual obligation and finally to assist decision-making for attracting post-commencement finance.…”

Section: Challenges Surrounding Business Rescuementioning

confidence: 99%

“…Two entrepreneurs who had a negative experience of BR felt that by being personally involved in communicating with creditors, and not having the BRP do all the work, would have had a better effect on creditor's reaction to BR. Pretorius and Rosslyn-Smith (2015) acknowledge that a key success factor in the effective communication of a rescue plan is pre-engagement with affected parties, as this allows the BRP to manage expectations and educate stakeholders.…”

Section: Process Learningsmentioning

confidence: 99%

See 2 more Smart Citations

Exploring entrepreneurial learning during formal business rescue processes: Insights from the South African experience

Roux

Pretorius

2017

SA j. hum. resour. manag.

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Orientation: Currently, little is known about entrepreneurial learning under turnaround and rescue conditions. A better understanding of the content dimensions as well as the factors that drive or restrain entrepreneurial learning during business rescue (BR) is relevant for theory and industry development.Research purpose: BR is a fairly new regime in South Africa that extends beyond turnaround practices. It is acknowledged that business failure can fuel cognitive processes and subsequently entrepreneurial learning but to what extent in the context of formal BR proceedings requires exploration. Practice suggests that the role of the business rescue practitioner (BRP) as ‘disproportionate influencer’ can affect the learning of filing entrepreneurs.Motivation for the study: In the absence of guidelines, this study set out to explore and make sense of the specific content dimensions that entrepreneurs learn during such proceedings to assist role players.Research design, approach and method: The research question for this exploratory investigation obtained first-hand accounts from subjects that have been directly involved in BR proceedings. Semi-structured interviews were conducted. ‘Investigator triangulation’ was also used to extract as much richness and data as possible applying interpretative phenomenological analysis.Findings: We extracted three key content dimensions which entrepreneurs learned during BR: rescue process, business related and personal learnings. Entrepreneurs with ‘positive’ experiences of BR learned more than those with negative experiences. The key driving and restraining factors to entrepreneurial learning were both associated with the behaviour of the BRP.Practical/managerial implications: BR has introduced another dimension to learning from business failure. Understanding the content dimensions learned by entrepreneurs during BR broadens insights of the Regulator, BRPs and educators about the potential long-term effects of BR on the factors that can either drive or restrain learning during BR proceedings.Originality and value: The findings led to an enriched understanding of specific entrepreneurial learning content dimensions that take place under BR proceedings. It also directs future research into entrepreneurial learning when effected by BR.

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Section: Process Learningsmentioning

confidence: 64%

Section: Challenges Surrounding Business Rescuementioning

confidence: 99%

Section: Process Learningsmentioning

confidence: 99%

See 1 more Smart Citation

Exploring entrepreneurial learning during formal business rescue processes: Insights from the South African experience

Roux

Pretorius

2017

SA j. hum. resour. manag.

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“…Rosslyn- Smith and Pretorius (2015) investigated stakeholder expectations of the business rescue plan from a South African perspective. They acknowledge that the business rescue plan legally recognises affected parties.…”

Section: Business Rescue and Stakeholdersmentioning

confidence: 99%

“…They acknowledge that the business rescue plan legally recognises affected parties. Other stakeholders are accounted for through section 7(k) of the Companies Act, which requires business rescue to balance the rights and interests of all relevant stakeholders (Rosslyn- Smith & Pretorius, 2015). Given that regulatory authorities and other external stakeholders like special interest groups are not specifically addressed in business rescue legislation, their omission may be detrimental to the turnaround effort (Rosslyn- Smith & Pretorius, 2015).…”

Section: Business Rescue and Stakeholdersmentioning

confidence: 99%

Role of stakeholders in business rescue

Lusinga

Fairhurst

2020

South African Journal of Business Management

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Purpose: It is widely accepted that stakeholders play a role in the turnaround of an organisation. However, the exact role is unclear. This study set out to investigate the roles of stakeholders in the success of business rescue through the lens of stakeholder theory.Design/methodology/approach: The study research design is qualitative following an exploratory approach. The choice of technique for the study was semi-structured interviews.Findings/results: The findings indicate that key stakeholders go beyond affected parties as described by Chapter 6 of the Companies Act. Creditors are considered the most influential stakeholders due to their ability to vote on the business rescue plan, followed by post-commencement funders and employees, to ensure business continuity. Customers were given the same level of importance by the business rescue practitioners as other affected parties. Due to the dynamic nature of business rescue, business rescue practitioners prioritise resourceful stakeholders when managing the process. A simplified framework illustrating roles of stakeholders during business rescue is presented.Practical implications: Stakeholder management should be recognised as a valuable exercise that must be allocated time and resources. Business rescue practitioners should recognise stakeholder influences at different stages of the business rescue process.

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Enhancing creditor decision-making in South African business rescue proceedings: a comprehensive analysis of information requirements in business rescue plans

Kekana,

Pretorius,

De Abreu

2024

IJLMA

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Purpose Business rescue, as a mechanism to aid financially distressed companies in South Africa, has received considerable academic and practical recognition. However, the business rescue plan is an overlooked and, perhaps, underdeveloped aspect of the regime. For stakeholders, this is the ultimate decision-making document. Creditors are the most influential stakeholders in business rescue proceedings owing to their voting rights. For creditors to make informed decisions and exercise their votes meaningfully, the business rescue plan should be transparent and adequately disclose relevant and reliable information. This study aims to identify creditors’ primary information needs to enhance the sufficiency and decision-usefulness of business rescue plans, not only to entice the vote of creditors but to enforce accountability from practitioners. Design/methodology/approach Using a qualitative research design, semi-structured interviews were conducted with 14 executives from 10 South African financial institutions. Findings The findings reveal that comprehensive disclosure of financial, commercial and legal information in business rescue plans was a critical antecedent for stakeholder decision-making. Additionally, leadership and social impact information were influential determinants. This study advances academic knowledge and, for practitioners, adds value to the development of business rescue plans. This can enhance creditors' confidence in supporting the rescue effort and approving the plan. Practical implications This study advances academic knowledge and, for practitioners, adds value to the development of business rescue plans. This can enhance creditors' confidence in supporting the rescue effort and approving the plan. Originality/value The originality of this article lies in its investigation of how creditors assess the information in BR plans as a precursor to supporting the company’s reorganisation in a creditor-friendly business rescue system such as South Africa. This study provides novel insights into the decision-making process, particularly how creditors assess BR plans, address information asymmetry and vote on the plan.

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Stakeholder expectations of the Business Rescue Plan from a South African perspective

Abstract: Background: A business rescue plan has to comply with a new and vague set of

Cited by 11 publications

References 12 publications

Exploring entrepreneurial learning during formal business rescue processes: Insights from the South African experience

Exploring entrepreneurial learning during formal business rescue processes: Insights from the South African experience

Role of stakeholders in business rescue

Enhancing creditor decision-making in South African business rescue proceedings: a comprehensive analysis of information requirements in business rescue plans

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