South Africa—Cross-border insolvency under the common law

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • South Africa—Cross-border insolvency under the common law
  • Coronavirus (COVID-19)
  • Overview of cross-border insolvency
  • Legislation governing cross-border insolvency
  • Common law cross-border insolvency
  • Outward bound request
  • Inward bound request

South Africa—Cross-border insolvency under the common law

Coronavirus (COVID-19)

This content is affected by the coronavirus (COVID-19) pandemic. For further details, take a look at our Coronavirus (COVID-19) toolkit and Practice Note: Coronavirus (COVID-19) Tracker of insolvency reforms globally [Archived]. For related news, guidance and other resources to assist practitioners working on restructuring and insolvency matters, see: Coronavirus (COVID-19)—Restructuring & Insolvency—overview.

Overview of cross-border insolvency

As the financial world becomes smaller and with the increase in cross-border transactions, it invariably will happen and has happened that a South African liquidator or trustee may have to deal with assets of the insolvent or liquidated entity which are located in a different jurisdiction. In addition, conversely, a foreign trustee of an estate or company liquidated in that foreign jurisdiction may find that certain assets of the entity or individual are located in South Africa.

Legislation governing cross-border insolvency

The Cross Border Insolvency Act 42 of 2000 seeks to regulate the position insofar as foreign trustees seeking to deal with assets in South Africa is concerned, as well as where a local trustee seeks to deal with assets situated in a foreign jurisdiction.

The difficulty with the Cross Border Insolvency Act 42 of 2000 is that the Act only applies in respect of any state which has been designated by the Minister by notice in the Gazette. Unfortunately, the Minister has not as yet

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