Company voluntary arrangements (CVA) & administration of companies: an appraisal of the innovative corporate insolvency procedures under the companies and Allied Matters Act 2020

Abstract

The day to day economic and financial challenges in Nigeria have posed a big threat to the existence of many business entities. So many companies have become insolvent (unable to pay their debts), struggling to carry on as a going concern and are consequently faced with the risk of being wound up by its creditors. In a bid to save such insolvent companies and give them several options at being successful again in the future rather than being dissolved, the current corporate legal framework in Nigeria has recently introduced two new insolvency procedures namely Company Voluntary Arrangements (CVA) and Administration of Companies. To aid the appreciation of these innovations this article sets out to analyze the past corporate insolvency procedures in Nigeria before the introduction of the new procedures under the Companies and Allied Matters Act 2020 while also understudying these new insolvency procedures, the purpose they set to achieve and likely barriers that may hinders the effectiveness of these innovative procedures. It makes recommendations on what can be done to ensure that these new procedures achieve their purpose in the corporate sphere in Nigeria.