Abstract

This study is a comparative legal analysis of the legal regime for modern corporate rescue mechanisms in Nigeria and the United Kingdom (UK). For the purpose of this paper, modern rescue mechanisms are Company Voluntary Arrangements (CVA) and administration orders. They are described here as ‘modern’ because corporate rescue, in general, is not entirely new. However, the CVA and administration orders have recently emerged in the insolvency space in Nigeria. Interestingly, Nigeria’s modern rescue regime was modelled after UK Insolvency Act 1986. This study, therefore, comparatively examines the nature and dynamics of the modern corporate rescue in Nigeria and the UK. The primary goals are to determine the adequacy, or otherwise, of Nigeria’s legal regime, and to comparatively interrogate UK policy lessons and judicial experiences for Nigeria. It argues that the introduction of the CVA and administration order under the Companies and Allied Matters Act 2020 is laudable. It is laudable because, at last, Nigeria has watered down the focus on liquidation of companies in financial distress. Instead, companies in financial distress now have an option to be revived and given the opportunity to operate as a going concern. However, beyond a lack of in-depth literature, the new regime is faced with some legal challenges that are capable of defeating the benefits of modern corporate rescue procedures in Nigeria. Consequently, this study examines some of these legal challenges and proffers recommendations for the reform of modern corporate rescue procedure in Nigeria.