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What separates administration from receivership
The optimal option for recovery of debts owed by a distressed entity will depend on numerous considerations including the legal rights of the stakeholders to initiate administration, receivership, liquidation, among others. PHOTO | SHUTTERSTOCK
In recent years, the media has been awash with reports of companies in deep financial distress.
Prominent among them are Nakumatt Holdings, ARM Cement and more recently, Mumias Sugar Company. As observers collectively ponder what went wrong with these companies, market players are watching to see if the provisions of the Insolvency Act, 2015 can help to put the situation right, keeping in mind that there may be many more casualties in the pipeline as a result of Covid-19.
