CORPORATE RESCUE MECHANISMS IN NIGERIA: A COMPARATIVE APPROACH

Abstract

Corporate rescue are strategies put in place to salvage financially distressed company in order for such company to remain a going-concern. The Companies and Allied Matters Act (CAMA)1 2020 introduced significant milestones / improvements in the corporate sphere of Nigeria. With the enactment of CAMA 2020, rescue mechanisms such as Company Voluntary Arrangement (CVA)2 and Administration are now available to insolvent companies in Nigeria which if explored, can make such companies retain their viability. Considering the legal and institutional frameworks on corporate rescue mechanisms of some foreign jurisdictions, one would be left with no other option but to advocate for a further improvement on what is applicable in Nigeria. The objectives of this paper were to review the provisions of CAMA 2020 on corporate rescue in Nigeria and to highlight areas that need improvements comparing it with what is note-worthy from other jurisdictions. This paper adopted doctrinal research methodology with data sourced from primary sources such as statutes and case law as well as secondary sources which included textbooks, journal-articles and Internet materials. It is the finding of this paper that the existing provisions on corporate rescue mechanisms now in Nigeria are inadequate. This paper therefore recommends an independent moratorium for CVA, standalone legislation and a separate court for corporate rescue matters.