KENYA Trends and Developments Contributed by: Noella Lubano, Paul Kamara, Kateline Mang’ich and Anne Cheloti, Oraro & Company Advocates
• if it is proven that a company is unable to satisfy its debts as and when they fall due. Courts also investigate whether the company’s assets are less than its liabilities when considering whether a company is insolvent. Conclusion In summary, there is a trend in Kenya whereby credi - tors are using insolvency proceedings, especially liquidation, to pressure companies into paying their debts. Such actions may lead to irreparable harm being sustained by companies. Luckily, various safe - guards have been put in place to prevent this, includ - ing the requirement that a valid statutory demand has to be issued. In addition, before a company is placed under liquidation, the court has to determine if the creditor is using the court as a debt collection mechanism, whether there is a valid debt that is not substantially disputed and whether the company is unable to pay its debts.
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