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The law on Corporate Rescue in Zimbabwe

Corporate rescue was introduced in Zimbabwe through the promulgation of the current Insolvency Act [Chapter 6:07] in June 2018. The concept of corporate rescue was introduced in Zimbabwe as a business rescue strategy. The Supreme Court in Metallon Gold Zimbabwe (Pvt) Ltd v Shatirwa Investments (Pvt) Ltd & Others 2021 (2) ZLR 193 (S) 199 held that:

“With the passage of time, judicial management, which had been in terms of s 300 of the former Companies Act, became outdated and failed to cater for the needs of the modern-day business environment. It had several unsatisfactory aspects that defeated the purposes of business rescue.

Corporate rescue, on the other hand, is seen as a measure which seeks to avoid the liquidation of a company in order to preserve it in a solvent state for the benefit of the company’s security holders and creditors including the company’s workers, as well as the society in which it exists. This approach is broader than the approach under judicial management, in that it seeks to cover the interests of all stakeholders who benefit from the existence of the entity concerned.”