To ensure quick and efficient resolution of insolvency and restructuring proceedings and to address business recovery in Nigeria, stakeholders have called for effective legal and regulatory structures.
They also called for a judicial approach to insolvency, which requires the backing of robust legislation.The stakeholders made these calls at the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) yearly international conference with the theme; “Restructuring and Insolvency in Times of Economic Challenges.”
Justice Simon A. Amobeda of the Federal High Court, Kano, said legislative reforms that modernise insolvency frameworks can empower the judiciary to manage restructuring processes more effectively.
According to him, a strong legal framework that equips the judiciary with modern tools will ensure a more responsive and efficient insolvency process, particularly in times of economic challenges.
In his paper titled, “Strategies for fostering judicial expertise in insolvency and restructuring”, Justice Amobeda said as the complexity of financial systems and corporate entities continues to grow, so too does the necessity for enhancing judicial expertise in these matters.
“This calls for a concerted effort to equip our judges with the requisite knowledge and skills to address the challenges posed by modern insolvency and restructuring cases effectively,” he said.
On the challenges of handling insolvency and restructuring, Justice Amobeda lamented that limited judicial expertise in insolvency matters, procedural delays and inefficiency, lack of specialised insolvency courts, and challenges in cross-border insolvency among others, affect the process of insolvency.
Speaking on the topic, “Promoting Alternative Dispute Resolution (ADR) to resolve issues outside of court”, Managing Solicitor, Trizon Law Chambers, Foluke Akinmoladun said in today’s complex legal and financial landscape, lawyers are essential facilitators of debt dispute resolution through mediation and arbitration.
“They provide invaluable expertise, guide their clients through ADR processes, and ensure that settlements and awards are legally sound and enforceable. By leveraging these alternatives to litigation, lawyers help preserve relationships, reduce costs, and achieve timely and fair resolutions,” she said.
Registrar General, Corporate Affairs Commission (CAC), Hussaini Magaji, said the utilitarian value of the concept of business recovery was more compelling now than in other times.
Magaji who was represented by the Special Assistant to the Registrar-General, Terver Ayua-Jor stated that changes in approach and legal framework came with the promulgation of the Companies and Allied Matters Act (CAMA) No.3 of 2020 Sections 434 –549 and 718 – 727.
Magaji said the Act introduced three new major insolvency processes which are Company Voluntary Arrangement (CVA), Company Administration (CA) and Netting.
He added that the Act in section 705 (1) (d) recognised BRIPAN as one of the professional associations entitled to be given automatic authorisation to practice as insolvency practitioners by the commission.
Magaji said that in addition to the development of a framework for the accreditation of insolvency practitioners, the Commission issued insolvency regulations 2022 to drive the new framework.
The CAC registrar, however, noted that the current legal and administrative reforms had not translated into a quantum leap in business recovery processes. He said that despite the available legal reforms, less than 10 CVA and CA applications had been filed in the last three years of the issuance of insolvency regulation.
According to him, there are still more filings of the traditional processes of liquidations and receiverships. The president, BRIPAN, Chimezie Ihekweazu (SAN) said a lot of businesses have continued to fail and struggle despite the government’s efforts to bring about positive changes to the economic welfare of the people and the nation.
He noted that BRIPAN aims to create a rich platform to address not only the current business challenges but also to explore the opportunities that lie ahead for practitioners, business owners, regulators, judiciary and policymakers to find ways to achieve better results in the business and corporate regimes in Nigeria.
“As leaders and key stakeholders in the insolvency and restructuring landscape, we are tasked with the critical responsibility of ensuring that our legal and regulatory structures are equipped to address these challenges effectively while promoting economic growth, financial stability and long-term recovery,” Ihekweazu said.
President, Nigerian Bar Association (NBA), Mazi Afam Osigwe (SAN) stressed that in these times of uncertainty, the expertise of restructuring and insolvency professionals had become most crucial.
Osigwe said that effective restructuring and insolvency processes were essential to preserving business value, protecting jobs, and fostering investor confidence. He stated that as global and national economies experience pressures from multiple fronts, legal and financial experts need to collaborate to find sustainable solutions.
Osigwe added that the NBA, the largest professional body of lawyers in Nigeria, recognised the important role BRIPAN played in shaping insolvency practice in the country.
“We remain committed to working alongside BRIPAN to improve the legal and regulatory frameworks governing restructuring and insolvency.
“Our shared goal is to ensure that businesses facing financial difficulties have the best chance of survival while maintaining fairness and transparency for creditors, employees, and other stakeholders,” he said.
In his goodwill message, the NBA Lagos branch chairman, Olabisi Makanjuola said it is crucial for professionals and stakeholders to continue to collaborate, innovate, and develop frameworks that promote transparency, accountability, and efficiency in the management of distressed assets and entities.
His words: “As practitioners in the legal and business recovery fields, we are acutely aware that the way we approach insolvency, and restructuring can make the difference between the survival and demise of businesses.
“In the face of these challenges, restructuring is not just a tool for survival but also a means of rejuvenating companies and economies, providing the opportunity to emerge stronger and more resilient.”
