Preliminary analysis of business rescue plans suggested that a significant contrast exists between international reorganizational plans and those being published under the newly formed business rescue regime in South Africa. Since the South African regime has emerged from an international insolvency framework, an international benchmark was used to effectively assist in creating an evaluation tool. To better understand the expectations demanded of the plan, principles from comparable international regimes were identified. Data on regimes were obtained scrutinised and reported on; the expectations were extrapolated and aligned with Chapter 6 of the South African Companies Act, No. 71 of 2008, to determine whether the Act complied with a set of expectations based on an international perspective. The proposed framework shows the key principles that govern rescue plans worldwide. The framework could serve as a guideline for the evaluation of rescue plans and help practitioners to enhance what is seen as their key task, namely to compile the rescue plan. Comparison with the five key principles found by the research reveals particular shortcomings in Chapter 6 of the South African Companies Act of 2008. International regimes indicate that the rescue plan should adhere to a broader and more extensive set of expectations than those explicitly provided for by the Act.

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

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Background: Non-unitary insolvency systems require an initial choice between liquidation and rehabilitation. For those systems, the decision to further support rehabilitation is often reinforced by the estimate of a lesser return in liquidation. The creditors’ decision to either accept or reject the business rescue plan depends substantially on comparing the proposed liquidation value with the business rescue value that is mandated in the business rescue plan. Purpose: The purpose of this study is to compare the proposed liquidation value with the actual liquidation value of firms that had commenced business rescue proceedings but were subsequently liquidated. This study is exploratory; therefore, our aim is to use the findings of this study to derive future research opportunities for scholars to explore. Methodology: This research adopted a content analysis research approach by collecting documents such as business rescue plans and liquidation accounts, which are qualitative in nature, and describing these documents through quantitative data analysis. Findings: The study revealed that for the secured creditors’ sample, there was a significant difference between the proposed liquidation value and the actual liquidation value. For the unsecured creditors’ sample, this study found no significant difference between the proposed liquidation value and actual liquidation value. Limitations: The major limitation of this study was access to data; therefore, the huge decline in the actual sample size in comparison to the expected sample size. Value: To the researchers’ knowledge, this is the first study comparing the proposed liquidation value to the actual liquidation value in order to determine whether differences exist. As a result, this study tackles a novel perspective on one of the influences that can affect the vote. This may be of particular importance to creditors, who may find the results of this study to be useful. Lastly, the findings of this study derived future research opportunities for scholars to explore.

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