Metro Peech & Browne Wholesalers (Private) Limited has been placed (Under Corporate Rescue) – CR9/23 commenced corporate rescue proceedings in terms of section 122(3) of the Insolvency Act (Chapter 6:07).

In a public notice the company said: “We wish to draw your attention to section 126(1) of the Insolvency Act which provides as follows:

“During corporate rescue proceedings, no legal proceedings, including enforcement action, against the company, or in relation to any property belonging to the company or lawfully in its possession, may be commenced or proceeded with in any forum, except:

(a) with the written consent of the practitioner; or (b) with the leave of the Court and in accordance with any terms the Court considers suitable; (c) as a setoff against any claim made by the company in any legal proceedings, irrespective of whether those proceedings commenced before or after the corporate rescue proceedings began; or:

(d) criminal proceedings against the company or any of its directors or officers; or (e) proceedings concerning any property or right over which the company exercises the powers of a trustee; or (f) proceedings by a regulatory authority in the execution of its duties after written notification to the corporate rescue practitioner”.

Corporate rescue is the legal procedure which seeks to give a financially distressed company, time and space to regain viability. The aim of the procedure is to ensure that the faltering company is resuscitated.

The Insolvency Act in Zimbabwe permits directors or shareholders, to voluntarily place the company under corporate rescue when the company is in financial distress.

This provides the company facing closure, prospects of restoration, without claims from creditors derailing the process.

A company is said to be financially distressed, if it is unable to pay its debts i.e. its liabilities exceed its assets, and if there is a reasonable likelihood that the company may reach a position, within the next six months, where it will no longer be able to pay its debts as they become due and payable.

A reasonable prospect of rescuing the company, is proven through providing a factual foundation that the company can be rescued.