Deed of Company Arrangement Template for Nigeria

A Deed of Company Arrangement is a legally binding rescue plan that helps struggling Nigerian companies avoid liquidation. It sets out how a company's affairs and assets will be managed to pay creditors while keeping the business running. Under Nigeria's Companies and Allied Matters Act (CAMA), this agreement gives businesses breathing room to recover from financial difficulties.

The deed typically includes payment schedules, debt restructuring terms, and management changes agreed upon between the company, its creditors, and an appointed administrator. It offers more flexibility than bankruptcy and helps preserve jobs, supplier relationships, and business value - making it a vital tool for corporate recovery in Nigeria's business landscape.

Consider a Deed of Company Arrangement when your Nigerian company faces serious financial difficulties but still has potential for recovery. This option works best when you can show creditors that restructuring debts and continuing operations will yield better returns than immediate liquidation. It's particularly valuable when your business has strong fundamentals but temporary cash flow problems.

The timing is crucial - you need to act before insolvency becomes irreversible. Companies with valuable contracts, skilled workforce, or unique market position often benefit most. Under CAMA, this arrangement provides protection from creditor actions while you implement your recovery plan, making it ideal for businesses needing time to turn things around.

• Basic Debt Restructuring: Focuses on rescheduling payment terms and modifying interest rates while maintaining core business operations
• Asset Sale Agreement: Includes provisions for selling non-core assets to raise capital while preserving essential business functions
• Operational Restructuring: Details management changes, cost-cutting measures, and business model adjustments
• Creditor-Specific Plans: Tailors repayment terms differently for secured and unsecured creditors under Nigerian law
• Industry-Specific Arrangements: Incorporates sector-specific requirements, especially for regulated industries like banking or oil and gas

• Company Directors: Initiate the arrangement and remain responsible for day-to-day operations under modified terms
• Administrators: Licensed insolvency practitioners who oversee the arrangement's implementation and monitor compliance
• Creditors: Vote on the proposed arrangement and receive payments according to agreed terms
• Corporate Affairs Commission: Registers and maintains official records of the arrangement under Nigerian law
• Legal Counsel: Drafts the deed and ensures compliance with CAMA requirements
• Shareholders: May need to approve certain provisions, especially those affecting ownership structure

• Financial Assessment: Gather detailed records of assets, liabilities, cash flow projections, and current creditor claims
• Creditor Analysis: List all creditors, their claims, security interests, and potential voting rights
• Business Plan: Prepare realistic recovery strategies, including cost-cutting measures and revenue growth targets
• Legal Requirements: Check CAMA compliance requirements and Corporate Affairs Commission guidelines
• Stakeholder Input: Collect feedback from major creditors on acceptable repayment terms
• Documentation: Use our platform to generate a compliant deed that includes all mandatory elements under Nigerian law

• Company Details: Full legal name, registration number, and registered office address
• Administrator Details: Name, qualifications, and appointment terms of the insolvency practitioner
• Creditor Categories: Classification and treatment of different creditor groups under the arrangement
• Payment Terms: Detailed repayment schedules, amounts, and conditions for each creditor class
• Duration Clause: Specific timeframe for the arrangement's implementation
• Monitoring Provisions: Reporting requirements and oversight mechanisms
• Termination Terms: Conditions for early termination or default remedies
• Execution Block: Signature sections for company officers, administrator, and key creditors

A Deed of Company Arrangement differs significantly from an Intercompany Agreement in both purpose and scope. While both are formal business documents used in Nigerian corporate law, they serve distinct functions in different situations.

• Purpose: A Deed of Company Arrangement focuses on rescuing financially distressed companies through structured debt repayment, while an Intercompany Agreement manages ongoing relationships between related companies
• Legal Effect: The Deed creates a binding arrangement with creditors under insolvency provisions of CAMA, whereas Intercompany Agreements regulate normal business operations between group companies
• Timing: A Deed is implemented during financial crisis as a rescue mechanism, while Intercompany Agreements are used during regular business operations
• Parties Involved: Deeds require administrator oversight and creditor approval, while Intercompany Agreements only need participating companies' consent