Insolvency Law at Gambia
In The Gambia, insolvency and bankruptcy are primarily governed by the Insolvency Act (Chapter 15), the Debtors Act (Chapter 8:04), and the Winding Up of Companies Act (1955–1990), which collectively provide a legal framework for addressing corporate financial distress. (The Gambia - Bankruptcy & Insolvency - Brill - Reference Works)
⚖️ Key Features of Gambian Insolvency Law
1. Types of Insolvency Procedures
Liquidation (Winding-Up): This process involves the sale of a company's assets to pay off creditors. It can be initiated voluntarily by the company, by a court order, or under the supervision of the court.
Receivership: A receiver may be appointed to take control of a company's assets to recover debts owed to a secured creditor.
Arrangements: Debtors may propose arrangements to creditors to settle debts, subject to approval. (Insolvency Law Reform: The African Experience – Part I – ACLRH)
2. Legal Framework
Insolvency Act (Chapter 15): Consolidates and amends laws related to company insolvency.
Debtors Act (Chapter 8:04): Addresses personal bankruptcy and the rights of debtors.
Winding Up of Companies Act (1955–1990): Provides procedures for the dissolution of companies. (Gambia, The - United States Department of State)
3. Court Involvement
Insolvency proceedings are typically overseen by the High Court, which has the authority to appoint liquidators and receivers, approve arrangements, and resolve disputes.
4. Creditor Rights
Creditors have the right to initiate insolvency proceedings if certain conditions are met, such as the debtor's failure to pay debts owed. (Debt Collection in Gambia - Grandliga)
📊 Key Metrics (as of 2020)
Recovery Rate: Approximately 27.8 cents on the dollar.
Time to Resolve Insolvency: Approximately 2 years.
Cost of Insolvency Proceedings: Approximately 14.5% of the estate's value.
Outcome: The majority of insolvencies result in liquidation rather than business reorganization. ([PDF] Gambia, The - Doing Business)
⚠️ Limitations and Considerations
Lack of Regulatory Oversight for Insolvency Practitioners: There is no formal regulation or professional body overseeing insolvency practitioners in The Gambia.
Limited Reorganization Options: The legal framework primarily supports liquidation, with fewer provisions for business reorganization or restructuring.
Enforcement Challenges: Practical challenges exist in enforcing creditor rights and recovering assets during insolvency proceedings. (Insolvency Law Reform: The African Experience – Part I – ACLRH)
🧭 Practical Considerations
Legal Assistance: Engaging legal professionals experienced in Gambian insolvency law is advisable for navigating the complexities of the process.
Proactive Measures: Businesses facing financial difficulties should consider early consultation with legal advisors to explore available options and mitigate potential risks.
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