Statistics published by the official receiver on Kenyan insolvency matters reveal a number of interesting trends. Company voluntary arrangements and administration despite the potential for business rescue have had almost no uptake.
Liquidation despite its disadvantages remains the most popular insolvency process. For example, the liquidation of ARM Cement Limited saw secured creditors recover 62 per cent of their debt, preferential creditors 100 per cent, and unsecured creditors only 6.2 per cent. Overall, insolvency numbers have yet to reduce to pre-pandemic levels.
The Attorney General (AG) had proposed changes to the 2015 Insolvency Act. Key among these is the proposal to give insolvency officers more freedom to act. Administrators and liquidators require approvals from creditors or courts to take many steps.
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DISCLAIMER:
This briefing is a highlight of legislative and policy changes and is intended to be of general use only. It is not intended to create an advocate-client relationship between the sender and the receiver. It does not constitute legal advice or a legal opinion. You should not act or rely on any information contained in this legal update without first seeking the advice of an advocate.
