A CRITIQUE OF THE LEGAL REGIME FOR COMPANY RECEIVER AND MANAGER IN NIGERIA

Abstract

This study revisited the legal regime for corporate receivership in Nigeria. The essence is to
determine the challenges, if any, associated with the practices of receivership and proffer suggestions
for reform. Adopting a doctrinal methodology, the study critically examined the concept of
receivership in Nigeria as well as the rules of appointment and powers of receivers and managers in
Nigeria. The study argued that although the current legal regime for receivership in Nigeria is
commendable, there are immensity of legal challenges and uncertainties which largely affect the
core benefits of receivership as an insolvency mechanism in Nigeria. For instance, the dichotomy
between a receiver simpliciter and receiver manager has long overdue its usefulness. Also, there are
several reported cases of appointment of receiver without due regards to the condition precedent. In
addition, the cost of receivership procedure is left unregulated, which is unhealthy for a company
already in financial distress. Informed by the foregoing and other challenges, the study proffers
constructive recommendations for Nigeria’s policy makers. In particular, the study proposed that
the Nigeria’s Corporate Affairs Commission should introduce dedicated guidelines for receivership
in Nigeria, taking into account the existing loopholes in the legal framework. It is hoped that the
proposed guidelines will provide clarity and further strengthen receivership procedure in Nigeria.