Early intervention regime under the bank resolution framework in Nigeria: resolving the diverging interests
The legal frameworks in most jurisdictions make provision for early intervention in bank resolution as an exception to the general corporate formal insolvency regime. The exercise of the early intervention powers however contravenes well established shareholder rights and gives rise to legal acrimony as seen in the deluge of litigation that trailed the exercise of these powers in Nigeria in the aftermath of the global financial crisis of 2007-2009. This article examines the justification for early intervention regime in bank resolutions and considers the nature of the framework in Nigeria. Drawing examples from the framework in the United Kingdom and the United States, it considers the strengths and weaknesses of the Nigerian framework. While arguing in favour of its continued operation, it considers the ways of bolstering the extant framework in Nigeria.
Keywords: Early Intervention, Bank Resolution, Shareholder Rights, Companies and Insolvency