Post Provisional Judicial Management Order

December 2009

Administration

A total of 834 e-mails and of 84 faxes were received. All enquiries were answered. A second provisional judicial managers’ report was drafted and communicated on the 10^th of December 2009 to all stakeholders with e-mail addresses.

Urgent Court Applications brought against First National Bank

No access could be obtained to the bank accounts of the property companies held at First National Bank (FNB) in spite of the High Court orders for provisional judicial management (PJM).  The situation was exasperated by the logistical problem of obtaining required FICA documentation from the third provisional judicial manager appointed by court on all 16 of these companies.

This held serious implications for the property companies under provisional judicial management:

1.                  No operational costs could be paid.

2.                  Non payment of electricity bills, rates and taxes would have left the tenants without water and electricity whom would eventually threaten to move out.

3.                  Accumulation of debt would render the companies insolvent.

Urgent court orders were brought on the 18^th of December 2009 against the bank to gain access to required funds for payment of operational costs of the companies. Unfortunately FNB was not prepared to cooperate with the judicial management order and a further application was launched on the 21st of December 2009 against FNB for contempt of Court. The involved legal action created additional unforeseen costs for each property company and will have a serious impact on the financial statements rendered on the return date of the provisional judicial managements’’ reports to the High Court.

The provisional judicial managers did however manage to receive credit balances in the FNB accounts on the 21st of December 2009 and accounts were opened at Nedbank where the rent was paid into. The provisional judicial managers managed to settle most of the urgent outstanding accounts of the property companies where sufficient funds were available in the particular companies.

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