'Law should not hasten the death of an enterprise which proper intervention may yet save' — CJ urges judiciary, others

Chief Justice Paul Baffoe-Bonnie

Chief Justice Paul Baffoe-Bonnie has called on the judiciary and insolvency practitioners to prioritise the rescue of viable distressed businesses, stressing that liquidation should be considered only when efforts to revive an enterprise have failed.

He said financial difficulties should not automatically result in the closure of a business, particularly where there is a realistic prospect of recovery and preservation of jobs and investments.

"Financial distress should not automatically lead to the death of an enterprise. Businesses with the potential to recover should be given the opportunity to do so to preserve jobs and protect investments," he said.

Justice Baffoe-Bonnie made the remarks at an induction ceremony organised by the Chartered Institute of Restructuring and Insolvency Practitioners (CIRIP) Ghana as part of activities marking the institute's 20th anniversary.

More than 100 people were inducted into the profession after successfully completing a masterclass designed to strengthen their understanding of restructuring and insolvency practice, including the professional and ethical obligations of practitioners.

The Chief Justice said the enactment of the Corporate Insolvency and Restructuring Act, 2020 (Act 1015), had significantly changed Ghana's approach to dealing with financially distressed companies.

He noted that while the traditional approach to insolvency largely focused on winding up companies that could no longer meet their obligations, the current framework encouraged stakeholders to first assess whether such businesses could be rescued.

The Chief Justice said courts handling commercial disputes must also consider the broader economic and social consequences of decisions involving distressed enterprises.

He urged the judiciary to promote certainty, predictability and confidence in commercial matters while taking into account the economic realities surrounding cases brought before the courts.

“The law should not hasten the death of an enterprise which proper intervention may yet save,” he said.

Justice Baffoe-Bonnie also challenged insolvency practitioners to complement their technical expertise with sound judgment, independence, integrity and courage in the discharge of their responsibilities.

He said practitioners must be able to differentiate between businesses that deserved a genuine opportunity to recover and those whose continued operation would only delay an inevitable collapse.

“Behind an employee's salary is a family. Behind a creditor's claim may be another business struggling to survive. Behind an investment may be someone's lifetime of work and savings,” the Chief Justice added.

CIRIP pledges to strengthen profession

The President of CIRIP Ghana, Felix Addo, said the institute remained committed to advancing professional development and improving restructuring and insolvency practice in Ghana.

He said the organisation, which was established about 20 years ago as the Ghana Association of Restructuring and Insolvency Advisors (GARIA), was created to improve the management and treatment of distressed companies with the potential to recover.

"We are using this 20th anniversary to reflect on our achievements and challenges while preparing for the next phase of our development," Mr Addo said.

He described the masterclass as one of the major activities marking the anniversary, explaining that it was structured as a practical working session to equip participants with the knowledge and skills needed to practise as insolvency professionals.

Mr Addo further explained that licensed insolvency practitioners were authorised under the law to undertake administration, restructuring, liquidation and receivership, including the management of distressed assets and acting as trustees in bankruptcy.