Kgoro Consortium (Pty) Ltd and Another v Cedar Park Properties 39 (Pty) Ltd and Others (45678/2018; 5586/2019) [2020] ZAGPJHC 178 (30 June 2020)

Kgoro Consortium (Pty) Ltd and Another v Cedar Park Properties 39 (Pty) Ltd and Others (45678/2018; 5586/2019) [2020] ZAGPJHC 178 (30 June 2020)

The court found that the business rescue application was ill-conceived and lacked a factual foundation for a reasonable prospect of rescuing Cedar Park. The applicants failed to disclose that the sale agreement relied upon was interdicted, and there was no evidence of alternative buyers or funding. Kgoro lacked locus standi, having ceded its shares to Vantage, and Regiments' intervention was a belated attempt to salvage the application. The applicants' conduct was dilatory and intended to delay the inevitable liquidation. The restraint order was irrelevant to the business rescue proceedings, and postponement would only serve to prolong the creditors' prejudice. The City of Johannesburg...

Citation
[2020] ZAGPJHC 178
Parties
Applicant: Kgoro Consortium (Pty) Ltd; Applicant: Regiments Capital (Pty) Ltd; Respondent: Cedar Park Properties 39 (Pty) Ltd; Respondent: Vantage Mezzanine Fund II Partnership; Respondent: City of Johannesburg Metropolitan Municipality
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
30 June 2020
Case Number
45678/2018; 5586/2019
Procedural Posture
Urgent Application / Judgment on Three Consolidated Applications: Postponement/stay, Business Rescue, and Intervention
Outcome
Applications for postponement/stay and business rescue dismissed; intervention by City of Johannesburg in liquidation granted; punitive costs order against applicants and their attorneys.
Judges
Twala M L
Legal Topics
Business Rescue, Liquidation Proceedings, Shareholder Standing, Postponement of Proceedings, Punitive Costs, Creditor Intervention
Commercial and Corporate Civil Procedure Business Rescue Liquidation Proceedings Shareholder Standing Postponement of Proceedings Punitive Costs Creditor Intervention

Case Brief

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Parties

Kgoro Consortium (Pty) Ltd

Applicant

Regiments Capital (Pty) Ltd

Applicant

Cedar Park Properties 39 (Pty) Ltd

Respondent

Vantage Mezzanine Fund II Partnership

Respondent

City of Johannesburg Metropolitan Municipality

Respondent

Procedural Posture

Urgent Application / Judgment on Three Consolidated Applications: Postponement/stay, Business Rescue, and Intervention

Legal Issues

  1. 1 Whether Cedar Park Properties 39 (Pty) Ltd should be placed under business rescue in terms of section 131(4) of the Companies Act.
  2. 2 Whether the applications for postponement or stay of proceedings should be granted pending the outcome of restraint proceedings.
  3. 3 Whether the City of Johannesburg should be granted leave to intervene in the liquidation application against Cedar Park.

Ratio Decidendi

The court found that the business rescue application was ill-conceived and lacked a factual foundation for a reasonable prospect of rescuing Cedar Park. The applicants failed to disclose that the sale agreement relied upon was interdicted, and there was no evidence of alternative buyers or funding. Kgoro lacked locus standi, having ceded its shares to Vantage, and Regiments' intervention was a belated attempt to salvage the application. The applicants' conduct was dilatory and intended to delay the inevitable liquidation. The restraint order was irrelevant to the business rescue proceedings, and postponement would only serve to prolong the creditors' prejudice. The City of Johannesburg...

Court Disposition

Applications for postponement/stay and business rescue dismissed; intervention by City of Johannesburg in liquidation granted; punitive costs order against applicants and their attorneys.

Orders

  • Both the applications for a postponement or stay of the proceedings are dismissed with costs.
  • The application for placing Cedar Park under supervision and business rescue is dismissed.