Abstract
Company, upon its incorporation becomes a legal personality or “legal abstraction” with powers to act for it with respect to formation of contract, right to sue and be sued (a juristic personality), right to own properties (real properties and chattels) among others. However, the characteristic that distinguishes companies from other forms of business organization is that aside from the companies being different from its members, it has the capacity for perpetual existence. The exit of its members will not necessarily ‘terminates’ the life of the company, since at best such member reserves the right of transfer his/her shares. This legal attribute of a company has however not been true of many companies that found themselves in the “murky waters” of bankruptcy and may therefore have to go through the winding up process, which usually ultimately “terminates” the life of such companies. However, with the dwindling fortunes of companies in the 21 st century, and many having to wind up’ business activities as a result of insolvency, it becomes imperative that attempts be made to rescue the company from ‘dying’ rather than wait to give same ‘decent burial’ by way of liquidation and winding up process. This new concept is referred to as “Corporate Rescue” Keywords: Insolvency, Liquidation and Receivership, Corporate Rescue, Law Reform. DOI: 10.7176/JLPG/118-07 Publication date: February 28 th 2022
Highlights
The major source of corporate insolvency law in Nigeria is the Companies and Allied Matters Act (CAMA) 2020 which is a significant improvement on CAMA 2004
Insolvency law has been defined as a collection of laws and processes for the resolution of the financial affairs of companies in financial difficulties.1In Nigeria, the terms ‘insolvency’ and ‘bankruptcy’ are understood and used interchangeably to refer to both individual and company insolvencies
A careful analysis of the global best practices of insolvency law and practice reveals that more than ever before there is a dire need for adequate legal framework for insolvency practice that will make its fulcrum or focal point corporate/business rescue
Summary
No doubt play pivotal role in the economic growth of nations, at some point during the existence of a company, it is possible that such company is unable to settle its debts, having seemingly exhausted all the available means In such a circumstance, the liabilities of the company may even exceed its assets. At a time like this in the life of a company, the creditors and other stakeholders will have to appraise the options open to them to satisfy their respective interest and pursue same. The commonest of this option in Nigeria is to commence winding-up process of the ‘ailing’ company. In Nigeria till date, the speed at which the liquidators commence work when appointed cannot be overemphasized and the excitement and enthusiasm usually demonstrated while carrying out the assigned responsibilities leave much to be desired, as they left no one in doubt of their eagerness to bring to an end the existence of such insolvent companies
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