Kenya launches comprehensive book on Corporate Insolvency Law

The publication, Corporate Insolvency Law, authored by insolvency practitioner Sammy Ndolo, provides a detailed analysis of Kenya's corporate insolvency framework more than a decade after the enactment of the Insolvency Act, 2015.

The book examines the legal processes governing financially distressed companies, including administration, liquidation, receivership, company voluntary arrangements, schemes of arrangement, pre-insolvency moratoriums and cross-border insolvency. It also explores the insolvency regimes applicable to banks and insurance companies.

Speaking during the launch in Nairobi, Ndolo said the publication was informed by the lack of a single reference bringing together the Insolvency Act, court decisions and practical guidance on corporate insolvency in Kenya.

"When I began practising in this field, I quickly realised there was no single accessible text bringing together the law and practice governing corporate insolvency in Kenya," he said.

"Practitioners, judges, academics and students were forced to rely on fragmented statutes, scattered case law and foreign materials. This book is an attempt to bridge that gap and provide a reliable resource for everyone engaged in insolvency practice."

The publication comes at a time when demand for corporate restructuring and business rescue mechanisms is increasing as more firms grapple with financial distress.

According to recent data cited during the launch, at least 40 Kenyan companies applied for voluntary liquidation or bankruptcy protection in the nine months to March, compared with 24 during the same period a year earlier.

Liquidation cases increased by 56 per cent, while bankruptcy applications rose by 73 per cent over the period. The increase has been attributed to persistent cash flow constraints, weak consumer spending and delayed payments, despite improvements in inflation, interest rates and exchange rate stability.

Kenya's Insolvency Act, 2015, marked a significant shift in the country's insolvency regime by placing greater emphasis on business rescue, corporate restructuring and preserving viable enterprises instead of liquidation.

The publication provides commentary on the Act and draws on Kenyan legislation, local court decisions and comparative jurisprudence from Commonwealth jurisdictions to explain how the law has evolved and is applied in practice.

Legal practitioners say the growing number of financially distressed businesses has increased the need for greater understanding of insolvency and restructuring processes as companies seek alternatives to closure while creditors pursue recovery of outstanding debts.