There have been significant changes in the Nigerian Insolvency Framework in the last 12 months owing to the introduction of the Companies and Allied Matters Act, 2020 (“the New CAMA”) which came into force on January 1, 2021.

Prior to the advent of the New CAMA, the framework for insolvency under the 1990 CAMA focused on liquidation and receivership, management displacing and potentially value destroying tools. The weak debtor and creditor rights and insolvency framework with a limited restructuring menu meant a weak secondary market for distressed assets. The enforcement and realisation of creditors rights left little room for debtors to manoeuvre. There was debtor resistance to these management displacing tools leading to protracted litigation and erosion of value.

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