The Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) has trained the staff of the Nigeria Deposit Insurance Corporation (NDIC) on personal insolvency, liquidation procedures, and corporate restructuring mechanisms.
Speaking at the three-day training session held in Lagos, BRIPAN President, Chimezie Ihekweazu, explained that the programme was designed to enhance NDIC’s capacity in debt recovery, business restructuring, and management of distressed institutions.
According to Ihekweazu, the training covered a broad range of topics, including the winding-up process, asset realisation and distribution, voluntary liquidation, receivership, schemes of arrangement and compromise, secured creditors and securities in insolvency, company voluntary arrangements, and cross-border insolvency.
He noted that the initiative would strengthen participants’ understanding of personal insolvency as an important legal mechanism for debt management and the equitable treatment of creditors under the country’s law.
Ihekweazu described personal insolvency, also known as bankruptcy, as a viable yet underutilised process available to individuals and firms unable to meet their financial obligations.
“It is a technical process requiring strict application. Despite being clearly provided for in Nigerian law, it has seen limited use in our judicial system. Many practitioners avoid it, but this attitude is misplaced and should be discouraged,” he said.
Regarding liquidation, Principal, Epic Legal, Chinwe Chiwete, elaborated on the procedures involved in winding up limited liability companies and associations under the Companies and Allied Matters Act (CAMA 2020).
She noted that where liquidation involves assets or claims spanning multiple jurisdictions, the applicable laws of those countries must be observed, including their local insolvency statutes and, where relevant, the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency.
Chiwete observed that while many countries in Europe and North America have already adopted the UNCITRAL Model Law, Nigeria has yet to do so. She called on BRIPAN to collaborate with key stakeholders, including the Ministries of Justice, Industry, Trade and Investment, as well as the National Assembly, to push for adoption and domestication of the law.
Also speaking, Partner at PUNUKA Attorneys and Solicitors, Okorie Kalu, provided insights into corporate restructuring, describing it as both a legal and operational exercise aimed at reorganising a company’s structure during periods of financial distress.
He explained that under the Nigeria Deposit Insurance Act, the NDIC is authorised to act as liquidator for failed insured institutions whose licences have been revoked, in accordance with Section 40 of the Act. Before liquidation, however, the corporation is mandated to take certain precautionary steps, while Section 37 positions NDIC as a form of administrator assisting struggling financial institutions.
He added that the NDIC could pursue several restructuring options, such as directing management changes, arranging mergers or acquisitions with other insured institutions, or handling impaired assets through direct management or third-party companies, in line with Section 38(1) of the Act.
Kalu further highlighted that, under CAMA, the NDIC may also apply administration as a restructuring tool during liquidation, either on grounds of public interest or as a creditor seeking improved management outcomes.
While administration may appear to be a relatively new approach in Nigeria, Kalu pointed out that the country’s legal framework already provides several mechanisms enabling financial regulators such as the NDIC, to undertake business rescue and reorganisation efforts akin to administrative procedures. He stressed that a sound understanding of these provisions is vital for NDIC’s effective execution of its liquidation mandate.
