CORPORATE RESCUE PROCEDURES IN NIGERIA: LESSONS FROM CORPORATE RESCUE PROCEDURES FROM OTHER JURISDICTIONS

Abstract

The incidence and effects of Corporate Insolvency has made corporate rescue one of utmost importance, due to the sensitive position corporate bodies occupy in the economic development of every society. Corporate entities pursue their objectives and maintain their operation through borrowing and credit receipts which creates debts when they fall due. When the obligation to discharges these debts fails, the creditors attempt to sell the assets of the company which exposes the insolvent company or entity to common debt recovery mechanisms such as the liquidation of the assets of the company leading the insolvent company to winding up. The global trend is to make laws that promote the survival of companies in distress. This paper examined The Corporate Rescue and Restructuring Mechanisms in Nigeria, particularly those provided for under the Companies and Allied Matters Act (CAMA) 2020. It also explored the application and challenges of Corporate Rescue procedures in Nigeria, comparing Nigeria’s mechanisms with those from other jurisdictions such as the United Kingdom and the Republic of India to identify lessons to be learned therefrom and proffer cum propose reforms. Corporate Rescue was recognized as a critical measure to restore the financial health of a company whilst also ensuring the continuity of the distressed company, which ultimately benefits the creditors, the employees and other financial stakeholders of the company. This paper revealed several findings and challenges impeding the success of Corporate Rescue in Nigeria.