The Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) has provided specialised training for 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 over the weekend in Lagos, BRIPAN President, Chimezie Ihekweazu (SAN), 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.
On the subject of 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 is 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.
“Effective management of assets during liquidation is essential to the success of insolvency proceedings. Even when assets are insufficient to meet all claims, strict compliance with statutory provisions and best practices ensures fairness and satisfaction among all entitled parties,” she said.
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.
“Section 38 empowers the NDIC to assume management of a failing bank,” Kalu said.
He added that the NDIC could pursue several restructuring options, such as directing changes in management, 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.
“The concept of rescue is crucial,” he noted, referencing Section 39 of the NDIC Act and Section 444 of CAMA.
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 concluded that a sound understanding of these provisions is vital for NDIC’s effective execution of its liquidation mandate.
“Since the NDIC’s liquidation duties focus on asset recovery and realisation, a deeper grasp of the opportunities within general insolvency law will further enhance its operational toolkit,” he concluded.
