Repayment restriction
The statutory restriction limiting recovery of an equity replacing loan until the company has been rehabilitated.
Under section 14 EKEG, a shareholder generally cannot demand repayment of an equity replacing loan and interest while the company has not been rehabilitated. The statutory restriction also covers satisfaction by set-off, enforcement of a pledge or other means.
The repayment restriction is not a condition for classifying a loan as equity replacing, but a legal consequence of that classification. The directors and shareholders in a crisis hub places the consequences in context; the article on shareholder loans during a crisis under the EKEG explains repayment and set-off.
More information
General guidance, not advice on an individual matter.
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Equity replacing loan
A loan granted by a shareholder during a crisis that is treated as equity replacing under section 1 EKEG.
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Reorganisation proceedings
Insolvency proceedings designated as reorganisation proceedings when the conditions of section 167 IO are met.
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Restructuring
Measures concerning assets, liabilities, capital or operations intended under the ReO to avert insolvency and secure viability.
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