Addressing weaknesess in the judicial management process
IN view of recent cases of several listed companies going under judicial management, it is timely for the general public as stakeholders to better understand the intended purpose of such an undertaking.
Judicial management is a temporary court-supervised rescue plan for financially distressed companies to be returned to financial health after debt and corporate restructuring. It is not, as some might think, an exercise to dispose of assets at a better price compared to a liquidation in order to pay off creditors.
An application for judicial management can be made by the company, its directors or creditors. Upon successful application, a court order will be issued and a reputable public accountant (but not an auditor of the company) will be appointed as the judicial manager (JM).
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