INSOLVENCY LAW AND BUSINESS RECOVERY PRACTICES IN NIGERIA’S UPSTREAM PETROLEUM SECTOR: THE NEED FOR A PARADIGM SHIFT
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Date
2019-01
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal of Mechanical Engineering and Technology (IJMET)
Abstract
Insolvency and business recovery practices are not at infancy stage in Nigeria,
although it has not crystallized to a full profession as it is practiced in other relatively
advanced climes. As the global financial sector evolves, the focus of modern
insolvency and business recovery practices have shifted from winding up of insolvent
oil companies to reorganization, restructuring of such companies and its operations to
foster economic stability and financial propriety. But the case is the reverse in
Nigeria, as liquidation is seen as the panacea to insolvency. The study evaluates
Nigerian insolvency and business recovery laws to sustain modern businesses
practices to prevent incessant corporate failure. Many jurisdictions are now
overhauling their insolvency and business recovery laws to support business practices
and to reform the gaps identified. The study conducts comparative legal and policy
analyses of solvency and business recovery laws in Nigeria, Malaysia, India, South
Africa, United Kingdom and United States. These countries were selected because
their insolvency and business recovery laws are business rescue driven. The study is a
doctrinal legal research that adopts a point-by-point comparative approach with
library research method. The study finds that Nigerian law on insolvency seems
deficient with regard to business rescue, turnaround and restructuring. It concludes
that, regulatory agencies in the selected countries are more effective than those in
Nigeria because of the political will of the governments of the former to successfully
turn around insolvent oil companies, save jobs and protect creditors by optimising
businesses through restructuring and business turnaround strategies. The study
therefore recommends reform of Nigeria’s insolvency and business recovery law and
practices in conformity with the global best practices on insolvent companies rescued
and creditors driven strategies for healthy economy.
Description
Staff Publication
Keywords
Companies,, Creditor,, Insolvency,, Recovery Practices,, Nigeria
Citation
Olujobi, Olusola Joshua and Olusola-Olujobi, Temilola, Insolvency Law and Business Recovery Practices in Nigeria’s Upstream Petroleum Sector: The Need for a Paradigm Shift, International Journal of Mechanical Engineering and Technology 10(1), 2019, pp. 1609–1628. http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=10&IType=1