Business rescue decision-making: Post-mortem evaluation of an ‘orgy’ (original) (raw)
Related papers
Critical elements for decision making in business rescue plans
2014
Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a CHAPTER 4: Summary and Conclusion CHAPTER 5 List of References © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a CRITICAL ELEMENTS FOR DECISION MAKING IN BUSINESS RESCUE PLANS © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a UN United Nations UP University of Pretoria © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a CHAPTER 4: Summary and Conclusion CHAPTER 5 List of References © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a Underperformance Crisis Better return Business Rescue © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a of the business rescue plan from a South African perspective Summary and Conclusion References and Annexures © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a CHAPTER 4: Summary and Conclusion CHAPTER 5 List of References © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a © © U Un ni iv ve er rs si it ty y o of f P Pr re et to or ri ia a
Tasks and activities of the business rescue practitioner: a strategy as practice approach
Southern African Business Review, 2013
1A business rescue practitioner's (BRP) tasks are complex, vaguely stated and involve a wide range of competencies not accessible to the average business person. Details about what exactly BRPs do during a rescue need to be determined in order to guide licensing and build a qualifi cations framework for the education of BRPs. Through an adapted 'interview to the double' (ITTD) process, information that 47 BRPs gave as instructions to a 'double' was elicited. All these instructions were framed as practices and praxis, then categorised into activities associated with the tasks as identifi ed by the practitioners. Fifteen activities were derived from the practices and praxis in support of fi ve tasks, namely: taking control, investigating the affairs, compiling a rescue plan, implementing the plan and complying with the statutory process. Five activities, namely: analyse feasibility, meet with stakeholders, analyse viability, prepare the rescue plan and follow statutory process, contributed 55% of what BRPs do, thus guiding the fi ndings to give structure and direction to establishing what the educational requirements for BRPs should be.
South African Journal of Economic and Management Sciences, 2018
Background: The low success rate of business rescue has prompted debate relating to the effectiveness and continued suitability of business rescue as a mechanism to rehabilitate financially distressed companies. Although this legislation was implemented in May 2011, statistics indicate that the success rate for business rescues is only approximately 12%. A feature of the business rescue environment in South Africa is the lack of knowledge, necessitating more research in the field.Aim: This study focused on changes required to ensure the survival and increased success of the business rescue legislation.Setting: This research was undertaken in South Africa between 2015 and 2017.Methods: A mixed-methods research approach was utilised for the study. The approach entailed interviews with 7 of the top 10 business rescue practitioners to diagnose reasons for business rescue failure and establish factors that would contribute to successful business rescues. A survey was conducted with the m...
Business rescue decision making through verifier determinants – ask the specialists
South African Journal of Economic and Management Sciences, 2013
Business rescue has become a critical part of business strategy decision making, especially during economic downturns and recessions. Past legislation has generally supported creditor-friendly regimes, and its mind-set still applies, which increases the difficulty of such turnarounds. There are many questions and critical issues faced by those involved in rescue. Despite extensive theory in the literature on failure, there is a void regarding practical verifiers of the signs and causes of venture decline, as specialists are not forthcoming about what they regard as their 'intellectual property'. Research purpose: This article introduces the concept and role of 'verifier determinants' of early warning signs, as a tool to confirm the causes of decline in order to direct rescue strategies and, most importantly, reduce time between the first observation and the implementation of the rescue. Motivation for the study: Knowing how specialists confirm causes of business decline in practice could assist in analysis and deciding on strategies for the rescue earlier than can be done using traditional due diligence, which is time consuming. Reducing time is a crucial element of a successful rescue. Research design and approach: The researchers interviewed specialists with extensive experience in credit for rescue and turnaround. An experimental design was used to ensure the specialists evaluated the same real cases to extract their experiences and base their decisions on. Main findings: The specialists confirmed the use of verifier determinants and identified such determinants as they personally used them to confirm causes of decline. These verifier determinants were classified into five categories namely, management, finance, strategic, banking and operations and marketing of the ventures under investigation. The verifier determinants and their use often depend heavily on subconscious (non-factual) information based on previous experiences, rendering them 'irrational' in modern management perspectives. Practical/managerial implications: Decision makers and affected persons could benefit from the insights obtained through this study. Confirming early warning signs through verifier determinants would be beneficial for entrepreneurs who are creditors, company directors, rescue practitioners, government regulators, court officials and educators alike. Contribution/value add: Knowing the verifier determinants could assist decision making and improve the effectiveness of rescue strategies. Business rescue practitioners can improve their 'investigation of the affairs' activity by using such verifier determinants.
Acta Commercii
Orientation: To resuscitate financially distressed companies in South Africa, business rescue as introduced through the enactment of Chapter 6 of the Companies Act 71 of 2008 requires the business rescue practitioners (BRPs) to take management and financial control as part of their specific powers and duties.Research purpose: This study investigated what practices BRPs apply in order to achieve management and financial control.Motivation of the study: Business rescue practitioners are faced with complex assignments with no clear measurements in practice, thus making judgements subject to the perception of the enquirer. It was important to better understand the practices applied by BRPs to achieve management and financial control.Research design, approach and method: A qualitative study was conducted and 13 BRPs within the Gauteng Province were approached. These BRPs were registered with the Companies and Intellectual Property Commission and consisted of junior, senior and experience...
Exploring the commencement standard for business rescue
2018
Reorganisation is a relatively new development within insolvency law and is becoming increasingly popular across the world. It is complex, being both a second chance to some parties and great frustration to others. An understanding of these complexities is important to regulators, practitioners and academics. The choice to pursue proceedings is not always clear and is often clouded by overwhelming pressure, emotions and self-interest. The aim of this study is to provide a comprehensive and critical review of the standard that grants access to the commencement of proceedings and bridge the gap between the various perspectives, develop a cohesive understanding of the phenomena, upon which future studies can be based. The subject matter requires a broad approach to cover the various aspects at play. Therefore, the research is of a multidisciplinary nature and is explored through the incorporation of studies from business, law, finance, economics and entrepreneurship. The topic is diver...
The State of Business Rescue Practitioners Professional Accreditation
Sage Open, 2021
Business rescue practitioners (BRPs) are subject to many allegations of abuse and, therefore, professional accreditation has become a prerequisite. The Companies and Intellectual Property Commission (CIPC) licensing is linked to multiple professional bodies' knowledge and practices but is not generic. This study was guided by one key question: What is BRPs' accreditation's current state in a multiple professional body occupation? We used data mapped to scholarly and documented policy sources, categorized results from extensive reading, and integrated critical constructs (after the deconstruction of concepts) to yield a conceptual framework to develop a comprehensive understanding of professional accreditation. The results confirm the existence of a legal framework and institutional arrangements that are not coherently applied because of the absence of a professional accreditation framework (PAF). The proposed conceptual framework captures the concepts of the business rescue domain, professionalism, competency, accreditation, and definition of key terms to provide an interpretive approach to the BRPs' accreditation reality resulting in a PAF based on the integration of BRP tasks and services and accreditation, competency, and professionalism.
A competency framework for the business rescue practitioner profession
Acta commercii, 2014
Orientation: Business Rescue Practitioner (BRP) tasks are complex and involve a wide range of knowledge, tacit skills and experience not accessible to novices. Research purpose: Competencies required by business rescue practitioners (BRPs) to navigate a distressed venture were investigated. What BRPs actually 'do' during a rescue guided the development of a competency framework to inform future qualification guidelines for BRP education and accreditation. Motivation for the study: To investigate the research question: 'What are the competencies that underlie the activities of a business rescue practitioner?'. Research design, approach and method: A modified 'interview to the double' (ITTD) process was used to elicit instructions that a BRP would give to an imaginary 'double'. These instructions were analysed and rated for importance, transferability, knowledge requirement and skills requirement; in conclusion, these instructions were ranked and subjected to a content analysis. Main findings: Based on the main activities that were derived from the practices and praxis, one assignment and four supra (higher-level) competencies were consequent to the analysis. A BRP able to successfully navigate a distressed venture towards normal operations should demonstrate a high level of competency in sense-making, decision making and integration, achieved through collaboration as the central competency. Practical implications: Firstly, the study addresses educators' need for a framework of competencies to guide education. Secondly, it paves the way for the Regulator to develop a qualifications framework for accreditation. Contribution: The findings gave structure to the competencies underlying the activities of a BRP to navigate a rescue. Pre-business and financial acumen appears limited without these competencies containing insight, experience, intuition, heuristics, tacit knowledge, perceptive induction and more.
Investigating the direct costs of business rescue
Acta Commercii, 2021
Direct costs are defined as transaction costs or out-of-pocket expenses directly related to administering reorganisation proceedings. Direct costs include administrative costs, such as filing fees, paid to business consultants, lawyers, turnaround specialists, accountants and other professionals (Altman & Hotchkiss 2006:93; Armour et al. 2012:109; Bhabra & Yao 2011:43). Studies conducted across several jurisdictions, including the United States, Canada and the Orientation: The direct costs associated with business rescue proceedings are essential to the decision-making of directors, business rescue practitioners and other affected parties. Business rescue has come under criticism for being a costly procedure, but what constitutes these costs and how they are defined remain largely unknown. Research purpose: The aim of this study was to identify and measure the direct costs of business rescue proceedings in South Africa. This research also explored the relationship between direct costs and the following variables: firm size and duration of business rescue proceedings. Motivation for the study: Despite the significance of understanding reorganisation costs, astonishingly little is know about the size and determinants of the direct costs of business rescue in the South African context. Business rescue practitioners fees and other related expenses have been blamed for worsening business rescue proceedings' reputation. However, researchers have not yet determined the nature or quantum of such costs. Research design, approach and method: This study employed an exploratory sequential mixed-method research design. The first phase comprised semi-structured interviews supplemented by a closed card sort with 14 business rescue practitioners. The first phase resulted in direct cost categories and components used to develop a survey instrument. The survey was administered in the second phase and measured the direct costs for 19 South African firms previously under business rescue. Main findings: The first phase results show that the direct costs of business rescue consist of four categories: the basic remuneration of the business rescue practitioner, contingency fees, professional fee disbursements and general disbursements. Because of the small sample size, the results of the second phase were inconclusive. Practical/managerial implications: This research contributes to the management body of knowledge by providing business rescue practitioners, the management of distressed companies, and affected parties, especially creditors with a starting point into understanding the direct costs of business rescue proceedings. Contribution/value-add: This is the first study of its kind, to quantitatively measure the direct costs of business rescue in the South African context. Therefore, the results of the study may offer affected parties some insight and clarity regarding the nature of the direct costs of business rescue.
The business rescue practitioners' professionalism: are we there yet
Journal of Business Retail and Management Research, 2021
Purpose and context: The purpose of the study was to explore the construction of professionalism in a multiple professional bodies (MPB) landscape in South Africa (SA) and demonstrate how this construction can be used to enhance a professional accreditation regime. Professional accreditation has become a prerequisite for business rescue practitioners (BRPs). The Companies and Intellectual Property Commission (CIPC) licensing is linked to multiple professional bodies' knowledge and practices but are not generic. This study was guided by one key question: How do PBs providing BRPs construct professionalism, and to what extent can the existing construction of professionalism facilitate the development of a professional accreditation regime? Research design and methods: A qualitative research design used required researchers to use four consecutive steps, namely (a) interviewing member services' managers at four professional bodies (PBs); (b) systematic content analysis of codes of professional conduct and policy statements to identify constituent professionalism notions; (c) a systematic search of the literature to identify notions of professionalism mentioned in definitions and explanations of the construct; and (d) analysis of notions of professionalism using the constant comparison procedure to reveal critical themes. Results: A total of 90 separate notions of professionalism were identified in the 192 scholarly papers included in our study. The identified themes within business rescue practitioner (BRP) professionalism (emphasising relational aspects) point to practitioner dealings with (i) clients (business rescue candidates); (ii) government and others; (iii) the PB; and (iv) oneself to gain the essence of occupation. There is fragmentation between the constructed conceptualisations of professionalism among PBs, leading to an incoherent and inconsistent expert accreditation regime. Practical implications and value: The results from the indicated exploration steps were used to advance a programmatic framework to construct professionalism in an MPB landscape and set a future research agenda. The results also show that business rescue practitioners' professionalism cannot be attained in a multi-professional body setting with an integrated professional accreditation framework.