Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)Chapter 13 : Resolution of Financial ProblemsPart 3 : Debt relief and restructuring153. Application for extraordinary relief |
| (1) | A municipality may apply to the High Court for an order— |
| (a) | to stay, for a period not exceeding 90 days at a time, all legal proceedings, including the execution of legal process, by persons claiming money from the municipality; |
| (b) | to suspend the municipality's financial obligations to creditors, or any portion of those obligations, until the municipality can meet those obligations; or |
| (c) | to terminate the municipality's financial obligations to creditors, and to settle claims in accordance with a distribution scheme referred to in section 155. |
| (2) | The Court may make an order in terms of subsection (1) only if— |
| (a) | the provincial executive has intervened in terms of section 139 and a financial recovery plan to restore the municipality to financial health has been approved for the municipality; |
| (b) | the financial recovery plan is likely to fail without the protection of such an order; |
| (c) | section 154 has been complied with, in the case of an application for an order referred to in subsection (1) (b); and |
| (d) | section 155(1) has been complied with, in the case of an application for an order referred to in subsection (1)(c). |
| (3) | Notice of an application in terms of subsection (1) must be given to— |
| (a) | all creditors to whom the municipality owes an amount in excess of a prescribed amount, or if no amount is prescribed in excess of R100 000, in so far as those creditors can reasonably be contacted; |
| (b) | the MEC for finance and the MEC for local government in the province; |
| (c) | the Minister; |
| (d) | the Cabinet member responsible for local government; and |
| (e) | organised labour. |