CORPORATION IN DISTRESS: A COMPARATIVE STUDY OF RECEIVERSHIP AND ADMINISTRATION IN NIGERIA AND COMMON LAW JURISDICTIONS

Abstract

The period of insolvency is a critical period for a company and its creditors. The appointment of a receiver or a receiver and manager to recover the creditors' investment is the conventional method of dealing with such corporate financial difficulty. The debenture holders or their trustees may appoint the receiver/manager out of court or through the court. This approach has been criticized as lacking in promoting business rehabilitation and protection of greater shareholders interest hence the birth of company administration as a broader business rescue mechanism. This paper examines the law relating to receivers/ managers and administration in Nigeria. It also looks at developments in the law beyond receivers and managers in the United Kingdom, United States of America, South Africa and Australia to see what Nigeria can learn from these jurisdictions. It suggests that the Companies and Allied Matters Act 2020 should be amended and those parts of it dealing with receivership and winding up should be consolidated with the Bankruptcy Act 2004 dealing with personal insolvency into a single insolvency legislation. It also suggests that the new insolvency legislation should contain minimum standard for insolvency practitioners in Nigeria.