Business rehabilitation offers a viable debtor a structured path to recover while protecting the legitimate interests of creditors. Understanding the regime early can turn a looming insolvency into an orderly restructuring.
Scope and the automatic stay
On acceptance of a rehabilitation petition, an automatic stay protects the debtor from individual enforcement, preserving the business as a going concern. The debtor — or an appointed planner — prepares a plan setting out how creditors will be treated and how the business will return to viability.
The plan and creditor voting
Creditors vote on the proposed plan in classes; once approved and sanctioned by the court, it binds dissenting creditors. For creditors, active participation — verifying claims, scrutinising the plan, and engaging on treatment — is the most effective way to protect recovery.