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When a company enters business rescue, most creditors breathe a little easier: section 133 of the Companies Act imposes a moratorium that stops you suing or enforcing against the company without consent or a court's leave. What the moratorium does not do, by itself, is stop prescription from running. That distinction catches many creditors off guard.
Under the Prescription Act, a claim generally prescribes after three years unless it is interrupted (for example, by service of process) or by the debtor's acknowledgment of liability. Business rescue is not insolvency, and there is no automatic, blanket suspension of prescription simply because the company is under supervision. The moratorium curbs enforcement, not the passage of time on your claim.
In practice, that means two tracks run at once. On the rescue track, you should file your claim with the business rescue practitioner (BRP), engage through the section 145 process, and scrutinise the draft plan. On the prescription track, you must still protect the claim. If you cannot get consent to issue summons during the moratorium, consider two practical moves: secure a clear written acknowledgment of debt from the company or the BRP (minutes, correspondence, a claims reconciliation attached to the plan), or apply for leave to institute proceedings purely to interrupt prescription without derailing the rescue. Both routes reset the clock lawfully.
Timing matters in rescue. Plans often convert, compromise or defer claims. A creditor who arrives at the creditors' meeting with a preserved claim has leverage; a creditor who lets prescription tick away loses it. The safest posture is deliberate: treat the moratorium as a pause on aggression, not a pause on prescription.
Need to check a claim during rescue? Barnard's restructuring team can review your timelines, paper a compliant acknowledgment, or obtain targeted court leave so your claim survives while rescue runs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
