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What happens when a company’s board is deadlocked to the extent that directors can no longer agree on the decisions vital to the proper running of the company and its business?
If all else fails (and this is usually a last-prize option), liquidating the company and placing it into the hands of independent liquidators may be your only choice.
A sad tale (which played out recently in the High Court) of sibling in-fighting that reduced a successful and profitable property development company to dispute and deadlock provides a perfect example. We’ll discuss the Court’s decision, its reasoning, and the three grounds on which a court may liquidate a solvent company.
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“Unfair discrimination” in the workplace is both unlawful and severely penalised by our courts, so it’s vital to distinguish it from lawful “differentiation”.
Most employers and employees will have heard of the “equal pay for equal work” principle in our labour laws, but there is still a lot of uncertainty over its reach, and over when an employer may fairly and lawfully differentiate between employees carrying out the same duties and/or work of equal value.
Let’s clarify with reference to a recent Labour Court decision concerning two “surveillance auditors” in a casino, whose unequal pay packages sparked allegations of unfair discrimination on the basis of both race and gender.
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When a company goes into business rescue, creditors are often in for a beating. So as a creditor, if you had the foresight to cover your position upfront with personal suretyships from individuals with assets (normally the directors of the debtor company), you will no doubt be keen to recoup your losses by calling in those suretyships asap.
What happens though if you assent to a business rescue plan whereby the debtor company’s debt to you is extinguished? Does that also extinguish the surety’s personal liability to you?
Let’s have a look at the lessons for both creditors and directors in a recent case where two sureties tried to dodge a R5.5m claim in the High Court with that very argument …
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