What Businesses and Corporate Directors Should Know About Asset Recovery

1. The Commercial Reality of Trade Credit & Default in Kenya

In Kenya's dynamic commercial environment, extending trade credit, supplying goods on 30-day payment terms, and leasing commercial properties are necessary for business growth. However, when customers or tenants fail to honor payment commitments, unsecured trade receivables quickly choke cash flow and threaten enterprise solvency.

Too many corporate managers assume that legal action is the only remedy. In reality, a strategic asset recovery and risk mitigation approach—led by experienced auctioneers and corporate consultants—delivers faster, higher-yield results at a fraction of court litigation costs.

2. Pre-Transaction Protection: Enforceable Security Agreements

The most effective asset recovery occurs before credit is even extended. Under the Movable Property Security Rights Act (MPSRA 2017), any commercial enterprise supplying goods or credit can register a security right against a buyer's equipment, vehicles, or inventory on the official eCitizen Collateral Registry.

By coupling supply agreements with a registered security notice and a clear extrajudicial repossession clause, businesses can instruct Makuri Auctioneers to repossess and liquidate goods upon default without waiting years for a commercial court hearing.

3. Commercial Landlord Remedies: The Distress for Rent Act (Cap. 293)

For property owners and commercial landlords managing office blocks, shopping complexes, or industrial warehouses in Mombasa and Nairobi, the Distress for Rent Act (Cap. 293) provides a rapid, non-judicial remedy.

Under this statute, a landlord does not require a court order to levy distress. A landlord issues a formal distress warrant to a licensed auctioneer, who enters the leased premises, inventories the tenant's movable assets, and proclaims them. If rent remains unpaid after statutory redemption days, the goods are auctioned to recover outstanding rent arrears and legal charges.

4. Executing Court Decrees: The Bridge from Judgment to Cash

Winning a commercial lawsuit and securing a judgment decree is only half the battle. A decree does not deposit cash into your company bank account. To transform a paper decree into tangible funds, the plaintiff must apply for a Warrant of Attachment and Sale under Order 22 of the Civil Procedure Rules.

Licensed auctioneers act as Court Brokers executing these warrants: locating the judgment debtor's physical assets, securing police escort where necessary, taking possession, and conducting compliant public auctions to satisfy the decretal sum.

5. Turnaround Workouts vs. Forced Liquidation

Forced asset liquidation is not always the most profitable route. Where a debtor business possesses an ongoing viable enterprise hindered by temporary cash flow constraints, our Business Consultancy division, led by Director Joel Titus Musya (PhD BA Cont, MBA Strategic Mngt, BBA), helps negotiate structured debt repayment workouts.

These structured workouts preserve commercial relationships, secure immediate partial debt repayments, and establish binding collateral pledges that protect creditor interests in the event of subsequent default.