Corporate Insolvency: Principles of Administration under Kenyan Insolvency Law
Overview
This paper examines the administration procedure as a rescue mechanism for insolvent corporate entities under Kenyan insolvency law. It explains the roles of administrators, the distinction between voluntary and involuntary administrative receivership, and the key objectives and legal framework governing corporate administration under the Insolvency Act 2015.
What this coursework covers
- Introduction to administration as an insolvency procedure and alternative to liquidation
- Administration Law in Kenya: powers, appointment methods, and prerequisites for administrator appointment
- Insolvency Act 2015: statutory objectives and administration chapter provisions
Preview
Corporate Insolvency: Principles – Administration
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Corporate Insolvency: Principles – Administration
Under the Insolvency Law, administration is a procedure under the insolvency laws that functions as a mechanism to rescue for insolvent entities and allow the firms to continue operating. It is usually an alternative to liquidation or may precede liquidation. The administration procedure is basically commenced by an administrative order. When a firm is under administrative receivership, it is operated by an administrator, such as an interim Chief Executive Officer bestowed with custodial responsibilities for the assets and responsibilities of the organization on behalf of the credit owners. In this regard, the administrator may recapitalize the business or sell the business to new owners or demerge it into various components that can be sold and close down the remaining part. The administration procedure may be decided by the board of management, which is termed as voluntary administrative receivership. On the other hand, involuntary administrative receivership is usually decided by a court of law and the administrator will be appointed by the court. Several laws govern the procedure of administration in corporate insolvency. The Insolvent Act usually defines what ought to be done during the process of administration, including all the processes that must be followed to fulfill the intended objectives.
Administration Law
In Kenya, the Insolvency Act is the main law that governs the insolvency of corporate organizations.