The passage of the Corporate Insolvency and Restructuring Act, 2020 (Act 1015) has been met with widespread acceptance mainly for its revolutionary introductions. The timing is more significant given the economic uncertainties due to the COVID-19 pandemic.

Of remark is the restructuring of an insolvent Company within Sections 2 -78 of Act 1015 by the appointment of an Administrator/Insolvency Practitioner with specified expertise to steer the affairs of a distressed Company to profitability.

During the restructuring process, properties of the Company are protected by the effect of a temporary freeze on the rights of creditors and claimants against the Company under Section 30 of Act 1015. The creditors are however guaranteed increased participation in the administration processes under Sections 20-29.

In addition, distressed Companies may receive much needed Post-Commencement Financing to finance their operations. This debt, per Section 107 (3), takes priority over all other debts of the Company, thus an incentive for financial institutions to support Companies during the restructuring phase.

In the event that the restructuring process fails, liquidation proceedings may be commenced. Cross-border insolvency proceedings under Sections 150 to 152 consolidate and reduce the complexities involved in the liquidation of multinationals.