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Restructuring and insolvency law in Abuja, Nigeria pertains to the legal framework and procedures involving companies or individuals who are unable to meet their financial obligations. This area of law governs how businesses can reorganize their debts, assets, and corporate structures to remain solvent, or how they can systematically wind up operations when solvency cannot be restored. The capital city, Abuja, hosts several courts, agencies, and professionals with expertise in this field, making it a central hub for insolvency and restructuring proceedings in Nigeria.
Nigeria’s approach to restructuring and insolvency has evolved in recent years, supporting more transparent and flexible frameworks for both creditors and debtors. The enactment of the Companies and Allied Matters Act (CAMA) 2020 and the Nigerian Insolvency Act represents a significant stride in aligning the country’s laws with international standards. The aim is to promote economic stability, safeguard business interests, and ensure fair treatment for all parties involved.
Restructuring and insolvency issues can be complex, impacting not only legal rights but also the future of your business or personal finances. Common scenarios in which legal help is advisable include:
Lawyers specializing in restructuring and insolvency can provide strategic advice, represent your interests, and help you navigate the complex legal processes to achieve the best possible outcome.
Several local laws and regulatory frameworks govern restructuring and insolvency matters in Abuja, Nigeria:
Key aspects include the initiation of insolvency proceedings by creditors or debtors, the appointment of insolvency practitioners such as liquidators or receivers, the distribution of assets to creditors, and the impact of insolvency on employment, tax, and regulatory obligations.
Restructuring refers to the process of reorganizing a company’s financial or operational structure to restore profitability or efficiency, often without entering insolvency. Insolvency is a legal state where an individual or company cannot meet debt obligations as they fall due, sometimes resulting in legal proceedings such as liquidation or bankruptcy.
Insolvency proceedings may be initiated by the debtor company or person, a creditor, or certain regulatory authorities, depending on the circumstances and reasons for insolvency.
A company voluntary arrangement (CVA) is a binding agreement between a company and its creditors to repay debts over an agreed period, potentially avoiding liquidation. It requires approval from the majority of creditors and the court.
Liquidation involves winding up a company’s affairs, selling off assets, and distributing proceeds to creditors in a legally determined order of priority. After liquidation, the company ceases to exist as a legal entity.
Generally, directors are not personally liable for company debts unless they have provided personal guarantees or are found guilty of wrongful trading, fraud, or misconduct.
A liquidator or insolvency practitioner manages the insolvency process, including gathering and selling assets, paying creditors, and complying with legal requirements until the process concludes.
An insolvent company may continue operations during certain restructuring processes, such as administration or a CVA, but in liquidation, the company’s business usually ceases except for activities related to asset disposal.
The duration varies depending on the complexity of the case, size of the estate, number of creditors, and legal challenges. Some cases are resolved in a few months, while others can take years.
Creditors have the right to be informed, attend meetings, vote on proposals, receive payments from available assets, and sometimes challenge the conduct of the debtor or insolvency practitioner.
Yes, individuals can file for bankruptcy under the Bankruptcy Act. This involves court proceedings, asset transfers to a trustee, and legal protections against creditors during the process.
If you need more information or assistance, consider reaching out to the following resources:
If you require legal assistance regarding restructuring or insolvency in Abuja:
Taking prompt, informed, and strategic actions can help you achieve the best possible outcome when facing restructuring or insolvency situations in Abuja, Nigeria.
