COBRA’s business rescue saves 2000 jobs at Check One
24 February 2021

business rescue

COBRA’s business rescue saves 2000 jobs at Check One Supermarket

For many, “business rescue” is seen as a curse, signifying failure and the end of a business’ legacy. Yet, this is a misconception and something that’s preventing businesses from getting the help that they needIf business rescue is done properly, it is powerful tool to ensure that the business survives, thus saving jobs, tax revenue, production capacity and intellectual capital, which benefits all South Africans. This has to be better than a liquidation wherein all the foregoing is lost to provide creditors and banks with a portion of what is owed to them.  

Similar to Bankruptcy Protection in the USA, business rescue is essentially a restructuring process whilst under protection from liquidation. It refers to the thorough analysis of a company’s financial state, its affairs, debts, assets, and operationsand implementing a turnaround plan to rehabilitate it to a state in which it can trade out of its predicament and thereby fulfil its obligations  

Making business rescue more accessible  

COBRA, the initiative started by IQbusiness, Schindlers Attorneys and Engaged Business Turnaround, is best known for its shared value crisis management services aimed at assisting businesses in times of hardship.   

One company that sought business rescue services from COBRA was Check One Supermarket, which was in the throes of being liquidated by its creditors. At the time, the company approached the court to place the company into business rescue with their chosen practitionerrather than liquidation 

With the guidance of COBRA, Check One changed its court papers to instead appoint two COBRA business turnaround practitioners to lead its business rescue and be its business process reengineering partners. With COBRA’s help, instead of ending in liquidation, Check One was acquired by Hypercheck, with COBRA brokering the deal.   

Ian Fleming, CEO of Engaged Business Turnaround and a registered business rescue practitioner explained that helping companies like Check One is COBRA’s goal. “We started COBRA to assist with situations just like this, that’s to say, assisting businesses in distress. We took the time to fully understand Check One’s situation and successfully assisted in finding a suitable buyer to save the business from foreclosure.” He continued, “This initiative can prevent business leaders from losing their livelihoods, save employees from retrenchment, and positively impact the economy.”  

“Critical to a successful business rescue is the time that it takes to prepare, publish and execute the plan.  Only in very exceptional circumstances would COBRA business rescue practitioners request extensions to the prescribed 25-day period to publish the plan.  In the case of Check One, the business rescue plan to sell the stores was fully implemented inside 3 months of the company commencing business rescue.  Compare this to liquidations and other prominent business rescues which have dragged on for years.”  

In fact, the quick response to their seemingly hopeless situation resulted in the majority of Check One stores remaining open saving more than 2000 jobs.   

Addressing the perceptions around business rescue  

To make sure that more businesses have access to these kinds of opportunities, business owners and directors need to realise that business rescue isn’t a bad thing – when implemented correctlyUnfortunately, not every rescue is either successful or implemented correctly as envisaged by the law.   

Because of the negative perceptions around business rescue, companies often enter into it too late. Business rescue was formulated to be a restructuring tool. If a company feels it cannot pay its bills as they become due and payable in the next six months, then it should immediately be placed into business rescue or implement one of the alternatives provided for by law.  These alternatives include among other things: a board-mandated restructuring (without using business rescue), or a creditors compromise.  It is critical to get the decision right from the outset as to which route to follow, and the company should engage with reputable turnaround experts in order to help them make the decision.  Regardless of the route eventually followed, when the directors or members delay until liquidation is imminent, the task of turning around the business is that much more difficult.   

In truth, business rescue is key for turning around a failing business. Instead of throwing good money after bad by pouring resources into a struggling business, business rescue allows new capital to be more efficiently deployed to ensure the survival of the business, whilst providing the investor with some protection.  

The benefits of business rescue  

Business rescue provides a moratorium during which time all debts and contracts are put on hold, allowing the practitioner time to sort out the businesses affairs which should result in a better return for creditors and preserve much needed employment.  Speed is most certainly the essence of a successful rescue. The law specifies that the business rescue plan should be published within 25 days of the practitioner’s appointment. Whilst this is a tight deadline, there have of late been a few large rescues meeting this deadline, so it should be achievable in most cases.  

The immediate goal of any business rescue process is to save a company, but as Adam Craker, CEO of both COBRA and IQbusiness, explains, “It’s more than just saving the company. We need to look at the bigger picture. When a company is saved, it means saving tax revenue, production capacity and intellectual capital to the benefit of all the citizens in the country – not just those who are directly affected.”  

Ultimately, engaging in business rescue gives businesses a chance to continue contributing to the economy. Maurice Crespi, Managing Partner at Schindlers Attorneys, illustrates this with the following analogy, “If you cut the dying branches from a tree and treat the sickness, it has a better chance to regrow, but when you chop it down, there is no hope of recovery”.   

What to look out for when choosing a business rescue practitioner  

Your choice of business rescue practitioner is probably the single biggest determinant of whether your company will succeed or fail – so choose wisely. One thing to look out for is a strong track record; select a firm with a history of success and reputable practitioners who are trusted by commerce and industry and the key financial institutions.  This will make it easier for the practitioner to formulate a business rescue plan that works in the balanced interest of all affected parties (including shareholders), and to have the plan approved by the majority of creditors as required by law. Secondly, make sure that the firm has process reengineering partners that focus on your area of restructuring and a trusted partner network to assist you where needed.  

COBRA for instance, consists of network of over 80 partner organisations across various sectors (including lawyers, auditors, financial practitioners, marketing professionals and funding partners) that are dedicated to saving businesses while offering valuable insights based on real-life experiences in their respective fields. COBRA business rescue practitioners are able to draw on a wealth of expertise from the COBRA partner ecosystem in order to maximise the chances of a positive outcome, like that at Check One Supermarket.  

About COBRA 

COBRA is a not-for-profit registered entity with a consortium of enterprises that are united to use business as a force for good by assisting other companies to thrive in a challenging economy.  Our goal is to safeguard livelihoods, and ultimately to improve the social wellbeing of all South Africans.  

The founding and coalition members are committed to pooling their collective knowledge, experience, and resources to enable distressed businesses to stand a better chance of surviving the economic crisis that has been exacerbated by the COVID-19 pandemic.  

Founded upon the principle of shared value, COBRA sets out to unite the private sector to solve pressing issues in society. The founding partners recognise the critical role that private businesses must play in South Africa to ensure economic and social wellbeing, and to safeguard both lives and livelihoods.  

Within this shared value ecosystem, extensive business legal services, small business accounting, technology and business-turnaround expertise and related local business support services are made available to assist businesses in financial, legal, and operational distress. By helping vulnerable businesses, COBRA plays a vital role in preventing economic decline and unemployment.  More information available at 

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