Federal high Court, BRIPAN to improve Nigeria’s business recovery, insolvency system

The Federal High Court has partnered the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) to enhance the country’s business recovery and insolvency framework, aiming to improve the efficiency of insolvency procedures in Nigeria.

Insolvency law provides a legal framework for managing the financial affairs of individuals and companies facing such situations.

Chimezie Ihekweazu, SAN, President of (BRIPAN), stated this on Monday in Abuja during a courtesy visit to Justice John Tsoho, the Chief Judge of the Federal High Court.

Ihekweazu emphasised that the collaboration was focused on strengthening the administration of business recovery processes and improving the efficiency of insolvency procedures in Nigeria.

He explained that the Association had been exploring ways to revive struggling companies, noting that the court’s decision to establish a dedicated insolvency unit was a welcome development.

He emphasised that this move would significantly contribute to the long-term survival of businesses in the country.

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He said, “Businesses should not be allowed to fail or be liquidated. When insolvency arises, it’s important to provide options not just for debtors but also for creditors, regulatory bodies, and other stakeholders involved with these businesses.

“Our goal is to explore these options, reviving companies by addressing their insolvency challenges and boosting profitability. We are thrilled that the Federal High Court has taken this important step.”

Justice John Tsoho, the Chief Judge of the Federal High Court, emphasised that insolvency is a global issue that Nigeria cannot afford to overlook. He stressed that it is a crucial legal matter with significant implications for the economy, making it essential to give it the attention it deserves.

”This visit is a commendable step toward enhancing the practice of insolvency, which has not been well-regulated in the past. It is a crucial legal matter with significant implications for the nation’s economic health.

”If insolvency practices are not properly regulated, they can have negative consequences, prompting the court to establish an insolvency unit in line with the Company and Allied Matters Act, which mandates such a unit to oversee insolvency procedures.

”This unit is designed to ensure adherence to international best practices, as insolvency is a global issue, and Nigeria cannot afford to fall behind or deviate from global standards”, he noted.

BRIPAN expressed appreciation for this development, which they believe, would significantly enhance the practice of insolvency, particularly in managing company matters.

The focus is on managing troubled companies through receivership and ensuring that struggling businesses are given a chance to survive, rather than allowing them to collapse. In the past, the tendency has been for stakeholders to focus on liquidating assets, leading to job losses and widespread economic distress.

It will be recalled the Federal High Court had established an insolvency unit to ensure the effective implementation of laws related to Company Voluntary Arrangements (CVA),

This unit will offer insolvency practitioners a dedicated channel for supervisory and enforcement services, as well as fast-track services to ensure the smooth implementation of its mandate.