Cap. 631 Art. 38Conversion of pre- formulated preventive restructuring procedure into standard preventive restructuring procedure.

(1) The insolvency practitioner may, at any time during which a pre-formulated preventive restructuring order is in force, file an application to the Court to convert the pre-formulated preventive restructuring procedure into standard preventive restructuring, if it results to the insolvency practitioner that:

(a) after consulting with the officials of the debtor, the economic viability of the debtor is more likely to be preserved or restored if it is placed under standard preventive restructuring procedure; or

(b) after consulting with the creditors of the debtor, a significant proportion are not in favour of the pre-formulated restructuring plan, such as is likely to prevent the debtor from obtaining the approvals necessary for the confirmation thereof, and the insolvency practitioner is of the view that standard preventive restructuring is more likely to result in the successful negotiation and confirmation of a restructuring plan.

(2) The insolvency practitioner shall annex to an application made in terms of sub-article (1):

(a) any information or documentation previously submitted, in terms of articles 10(a) to 10(g), and article 10(i)(iii), that, following the initial submission thereof, requires update or revision; and

(b) a statement in terms of article 10(h)(i), which should also include details as to how the conversion of the pre-formulated preventive restructuring procedure into standard preventive restructuring procedure shall improve the debtor’s likelihood of preserving or restoring its economic viability.

(3) In the event that the Court accedes to the request and issues an order to convert the pre-formulated preventive restructuring procedure into a standard preventive restructuring procedure, for the purpose of determining the maximum duration of any stay of individual enforcement actions in terms of article 25(1), and the duration of the order placing the debtor under standard preventive restructuring in terms of article 33(1), the period shall be deemed to have started to run on the day on which the aforementioned stay and order commenced during the pre-formulated preventive restructuring procedure.