Companies Act, 1973 (Act No. 61 of 1973)Chapter XV: Judicial Management435. Pre-judicial management creditors may consent to preference |
| 1) |
| a) | The creditors of a company whose claims arose before the granting of a judicial management order in respect of such company may at a meeting convened by the judicial manager or provisional judicial manager for the purpose of this subsection or by the Master in terms of section 429(b)(ii), resolve that all liabilities incurred or to be incurred by the judicial manager or provisional judicial manager in the conduct of the company's business shall be paid in preference to all other liabilities not already discharged exclusive of the costs of the judicial management, and thereupon all claims based upon such first-mentioned liabilities shall have preference in the order in which they were incurred over all unsecured claims against the company except claims arising out of the costs of the judicial management. |
| b) | If a judicial management order is superseded by a winding-up order- |
| i) | the preference conferred in terms of paragraph (a) shall remain in force except in so far as claims arising out of the costs of the winding-up are concerned; and |
| ii) | an claims based on such liabilities incurred by the judicial manager shall be taken to have been proved and the provisions of section 366 shall not apply in respect thereof. |
| 2) |
| a) | A meeting convened by the provisional judicial manager or the judicial manager in terms of subsection (1) shall be convened by him by written notice sent by registered post at least ten days before the date of the meeting, as specified in the notice, to every creditor of the company whose name and address is known to him, and also by notice in one or more newspapers circulating in the district where the company's main place of business is situated. |
| b) | The last-mentioned notice shall comply with the provisions of section 40 (3) (c) of the Insolvency Act, 1936 (Act No. 24 of 1936), and shall appear at least ten days before the date of the meeting. |
| 3) | The provisional judicial manager or the judicial manager, as the case may be, shall preside over a meeting referred to in subsection (2), and the laws relating to insolvency shall apply mutatis mutandis in respect of the conduct of any such meeting, the right to vote thereat, the manner of voting and the calculation of the value of votes, as if such meeting were a meeting of creditors in an insolvent estate: Provided that for the purposes of voting at any such meeting convened by a provisional judicial manager, the claims of creditors shall be determined to the satisfaction of the provisional judicial manager. |