This is a process aimed at saving a company from collapse. It is provided for and regulated by the Companies Act (Chapter 24:03). If not saved a company is then liquidated. Judicial management fees are paid by the company and are regulated.
Process of appointing a judicial manager
- Where a company is unable to pay its creditors a creditor can apply to the High Court for the company to be placed under judicial management.
- Alternatively, the company can also apply for voluntary judicial management if it is unable to pay its creditors but there are prospects for it to be rehabilitated.
- If the High Court is satisfied that the application for judicial management has merit it can grant an order for judicial management.
- A creditor or the company, on making an application to the High Court, has the option of proposing a judicial manager otherwise the High Court appoints one at its discretion.
- Upon appointment, the judicial manager replaces the Board of Directors and executives.
- The Companies Act has provisions and requirements which the judicial manager has to follow in performing his / her assignments.
- Among other things, the judicial manager convenes a meeting of creditors to quantify and screen claims by the creditors, safeguards company assets, manages the company affairs, pay creditors, etc.