| dc.description.abstract | The continual survival of companies as going concerns is vital to every country and failure of
these companies has far reaching consequences that go beyond the owners and creditors of the
companies. It also affects the community at large. Corporate rescue mechanisms have been put in
place in different countries to try and ensure the continual existence of companies. In Zimbabwe
there is Judicial Management [JM], the corporate rescue mechanism that has been incorporated
into the Companies Act [24:03]. However, since dollarisation, the number of JM attempts that
have failed is disconcerting, with more and more distressed companies finding themselves
ushered into liquidation. This has called for an investigation into the factors why JM attempts
have flopped, with an intention of addressing these to make the procedure sounder.
This paper attempted to identify the factors that have hindered successful implementation of JM
and possibly propose counter measures or remedies to these negative factors. The research
started from a proposition that the costs of JM, choice and make up of JM practitioners,
regulation and monitoring of JM practitioners, macroeconomic failure to access capital had the
biggest influence on the performance of JM as a corporate rescue strategy in Zimbabwe. A
qualitative exploratory and inductive research was carried out and in-depth interviews used to
collect data, which was then analysed through the content approach method. Multiple factors
were discovered through the research findings for the failure of JM, within ability to access
capital and the incompetence of the JM practitioners cited as the major reasons for the failure.
Several other factors revealed from the research were misaligned legal framework, interference
by shareholders, the role of the directors, poor timing for initiating the JM attempts, poor
regulation and monitoring of the JM industry, unethical conduct by the JM practitioners, the
heavy workload of the JM practitioners, role of the creditors, lenience towards creditors’ plight
and inadequate provisions for JM. All the factors identified more than validated the research
proposal but went on further to provide other factors that were critical to the success of JM. It
was concluded that indeed, since dollarisation, JM had failed as a corporate rescue strategy and
several recommendations were made to enhance the JM procedure and recommendations for
further study were also provided. | en_US |
