Enhanced Protection for Secured Creditors in a Winding Up Under CAMA 2020

The Companies and Allied Matters Act, 2020 (CAMA 2020) has given secured creditors’ rights a much-needed boost in insolvency situations. Under the old CAMA, there were no clear provisions that distinguished and protected secured creditors, leading to conflicts between them and liquidators.

However, CAMA 2020 has introduced definitive provisions to clarify the rights of secured creditors, particularly financial institutions that are in the business of lending. This article will highlight key provisions of CAMA 2020, side by side with the provisions of the old CAMA, to bring the effects of the new provisions to the fore. It will help enlighten secured creditors, liquidators, and insolvency practitioners on these innovations to avoid or mitigate conflicts that arise over secured assets in winding up a company.

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