The Nigerian Company law dealing also with insolvency had not been amended for 30 years. It borrowed from the United Kingdom's 1948 Companies Act. In Nigeria, a company would be said to be insolvent only after a court declared it so. It is compulsorily wound up if it is unable to meet its financial obligations. Until August 2020, the general insolvency framework created was liquidation oriented and had virtually no formal collective framework for Business Rescue except for the ambivalent and neutral tool of scheme of Arrangement & Compromise. The new Law introduces a more robust insolvency and restructuring framework and provides business rescue options for companies in financial difficulty. Its accommodation of moratorium period and stay of litigation provides a lifeline to viable businesses which are still capable of being rescued. The Act notably adds the formal business rescue procedures of Company Voluntary Arrangements (Section 434), Administration (Section 443-549) and extends existing Scheme of Arrangements & Compromises to cover Reconstructions. Netting provisions (Section 718-721) have also been inserted in the new law to provide for protection of financial contracts in insolvency. This Webinar intends to enlighten participants on the impact of the new law, and highlight sundry initiatives that are or will be helping companies, actual or prospective local and foreign investors regarding ease of doing business, continuity in business, restructuring and/or exiting options/strategies available in the event of insolvency. It also intends to discuss how stakeholders should latch on or adapt to the new paradigm create by the new law particularly in a COVID-19 pandemic context which pandemic is tasking government, financial institutions and businesses to re-think.
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