Research Papers

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The Status of Receivership as an Alternative to Winding Up of Insolvent Companies in Kenya Pre and Post 2015 A Review of Relevant Law
(Mount Kenya University Law Journal, 2023) Mbila, Augustus Mutemi
When a company becomes insolvent, secured creditors stand at a better position to recover their debt than unsecured creditors. Secured creditors can recover their debt in several ways, including selling the secured asset and appointing receiver managers to run the business of the debtor company with a view to recovering the debt through profits and sales. How has the device of receivership evolved since its inception in England and adoption in Kenya through the repealed Companies Act? This paper seeks to trace this evolution of the device from England with a view to determining its purpose in Insolvency Law. The paper will then examine how the device was applied in Kenya through the repealed Companies Act and then how it has metamorphosed to administration in the current Insolvency Act. The paper will then conclude by determining whether creditors of insolvent companies are now better protected under administration than they were protected under receivership. The paper argues that the insolvency regime that was introduced by the Insolvency Act of 2015 significantly altered the way receivership operates in the country and such an alteration has promoted the protection of creditors while at the same time helping in the preservation of viable businesses.