Business recovery practitioners partner FHC on insolvency

BY Vivian Okejeme,  Abuja

The Business Recovery Insolvency Practitioners Association of Nigeria, has collaborated with the Federal High Court of Nigeria on insolvency to achieve the attention it deserved.

 The Association, through it’s President, Mr Chimezie Ihekweazu, SAN, said that collaborating with the FHC would go a long way in addressing issues of insolvency using global best practices.

Speaking while on a courtesy visit with his team to the Chief Judge of the court, Justice John Tsoho, Ihekweazu said the association had been looking for ways to bringing ailing companies back to life adding that the step the court took in establishing a solvency unit was a breath of fresh air as it would go a long way in ensuring the survival of businesses.

He said,  “Businesses should not be allowed to fail or to be liquidated but when insolvency sets in, options are provided not only for the debtors but also for the creditors as well as the regulatory institutions and those who have interest in most of the businesses.

“To explore the administration of those options with the aim of bringing those companies back to life with a view to dealing with their insolvency challenges and the profitability.

“So we are excited that the federal high court has taken this up,”he said.

In his reaction, the CJ acknowledging that the issue of insolvency was a global one, assured that Nigeria could not afford to lag behind in tackling it.

According to the CJ, it was a critical aspect of the law that had to do with the economy and so it must be given every attention it deserved.

“The visit is a commendable move to promote the practice of insolvency which before now was not so well regulated and it is a critical aspect of law as it has to do with the economy of the country.

“So when not well regulated, it has some kind of negative impact and so the court thought it wise to set up an insolvency unit in compliance and conformity with the Company and Allied Matters  Act because they require that there should be a unit that will regulate insolvency practice.

“And as to accord with international best practices because the issue of insolvency is global and so Nigerians cannot be lagging behind or doing something that is quite different from what the rest of the world is doing.

“So that is a key point which BRIPAN appreciates and that is the essence of their visit because they are excited about the development because it will greatly improve the practice of insolvency which looks into company matters.

“Like when a company has to go to receivership and the emphasis really is that companies that are going under should still be managed that they just don’t die out.

“But what has prevailed in the past is that once you have a troubled company, people are more interested in rushing at the assets and once it rounds up there are devastating effects.

“People lose jobs and it creates a lot of economic crisis so that is the essence of this meeting.”

Meanwhile, insolvency, in a legal context, is the inability of a person or company to pay debts that have become due.