An Examination of the Insolvency Law Framework and Business Recovery in Nigeria

Business insolvency, restructuring, and rehabilitation are governed in Nigeria by the Companies and Allied Matters Act 2020, which introduced new corporate voluntary arrangements and administration procedures, alongside the recently enacted Companies Winding Up Rules. This study examines the effectiveness of the insolvency and business recovery framework under CAMA 2020, the Federal High Court Rules, and the newly promulgated Business Rescue Framework, with reference to recent corporate insolvency cases in Lagos and Abuja. A doctrinal methodology analysing statutory provisions and 20 insolvency court decisions from 2020 to 2023 was combined with interviews of 12 insolvency practitioners. Results indicate that administration and corporate voluntary arrangement procedures introduced by CAMA 2020 remain underutilised because of judicial unfamiliarity, excessive procedural formality, and creditor preference for immediate liquidation. Pre-pack administration arrangements are legally uncertain. The restructuring framework for large corporate groups remains inadequate relative to the complexity of Nigerian conglomerate structures. The study concludes that the CAMA 2020 insolvency framework represents a significant legislative advance but requires judicial education, practitioner awareness campaigns, and procedural simplification to achieve its rescue culture objectives. Recommendations include a Business Rescue Rules of Court, mandatory insolvency practice training for judges assigned to commercial divisions, and a formal pre-insolvency advisory service through the Corporate Affairs Commission.

Keywords: insolvency law, business rescue, CAMA 2020, corporate voluntary arrangement, restructuring