[Question] Retrenchment packages

[Christelle K]

Hi guys,

Looking for some advice please.

My business started going downhill beginning of 2016. I was in the process of selling my house and hoped to be able to pay off most of my debts out of the proceeds. In the meantime some of my suppliers were giving me a hard time, forcing me to start selling machinery and equipment to pay them. By approximately middle 2016 I was selling off my business' assets to pay my employees their weekly wages, who at that time were doing basically nothing. I sat together with the bargaining council and we calculated retrenchment packages for the employees, thinking that I would pay them when my property gets sold.

My property transaction was only registered in June 2017. By this time everybody was on the bandwagon to get a portion of the proceeds (I had signed as surety in my personal capacity for my business). My current situation is this : I do not have money left to pay the retrenchments.

[sterne.law@gmail.com]

Should you not be considering business rescue

[Greig Whitton]

This sounds like it may be too far gone for business rescue. The only outcome I can see is insolvency proceedings and let the creditors fight it out with the liquidators.

The personal suretyships are a whole different story, but not infallible. For example, if you are married in community of property, those suretyships may not be valid.

[Christelle K]

Thanks for the input. Everything else has been paid, either from selling assets or from the proceeds of the sale of my property. There is nothing to liquidate, the business ceased to exist in June 2016.

[Justloadit]

For example, if you are married in community of property, those suretyships may not be valid.

Can you elaborate further on this please

[Greig Whitton]

Can you elaborate further on this please

Sure: the relevant legislation is the Matrimonial Property Act. In general, someone married in community of property must obtain the written consent of their spouse before signing a personal suretyship for the agreement to be valid.

[Justloadit]

Sure: the relevant legislation is the Matrimonial Property Act. In general, someone married in community of property must obtain the written consent of their spouse before signing a personal suretyship for the agreement to be valid.

Tks, thought as much, but was not sure.