Advisory: The Path to Resolution Post-Supreme Court Intervention
This communication is intended for informational purposes only and does not constitute, nor should it be interpreted as, professional legal advice; the following analysis is an opinion based on documented facts and our professional experience.
To: CHYS Creditors, The Official Receiver, the High Court and Relevant Stakeholders
From: Sultan, Boardlot Africa Research
Date: July 19, 2026
Executive Summary
The Supreme Court’s ruling on July 3, 2026, has fundamentally altered the litigation landscape, providing a critical window for stakeholders to pivot away from the destructive, court initiated and court-driven liquidation toward a constructive, negotiated settlement. With an estimated KES 10 billion owed to approximately 3,000 creditors, the average exposure stands at KES 3 million per investor. The current “chaotic” liquidation path, characterized by asset seizures and administrative gridlock, threatens to deplete the recovery value for these stakeholders.
We propose a shift to a “Sell-Some-to-Complete-Some” strategy to safeguard creditor interests.
Proposed Asset Management Strategy
To maximize value recovery, we have categorized the identified property portfolio based on development status and liquidity potential:
1. Assets for Targeted Completion (Value-Add Strategy)
These projects are closest to completion and offer the highest potential to unlock equity through unit sales and project finalization:
The Alma (Ruaka)
The Ridge (Ridgeways)
Taraji Heights (Ruaka)
The Alma incomplete, yet its only 3 months away from completion and Cytonn says funding to complete is available. The court should take them up on this. There is simply no justification to sell a project like Alma in haste
2. Assets for Divestment (Liquidity Strategy)
These assets are prioritized for immediate sale to provide the liquidity necessary to fund the completion of the projects listed above and to settle initial creditor obligations:
Kilimani Parcels (three distinct parcels)
RiverRun Estates (Ruiru)
Newtown (Athi River)
Mystic Plains
Applewood (Karen)
Situ Village
The Negotiated Resolution Framework
To implement this, we recommend the following process:
Immediate Liquidity Trigger: We propose that proceeds from the sale of land assets, specifically the Kilimani Parcels, be used to settle an immediate 15% payment of total creditor dues to restore stakeholder confidence.
Structured Payout: Following the initial payment, we recommend a 5-year progressive repayment plan, allowing remaining properties to be sold at an optimal market pace rather than through forced fire-sale auctions.
Governance and Joint Receivership: To manage this transition, the Official Receiver should facilitate a meeting for creditors to elect legitimate, representative leadership. Subsequently, a Joint Receiver—mutually acceptable to Cytonn, the Creditors’ representatives, and SBM Bank—should be appointed to oversee the completion and liquidation plan. · The current court initiated and court handpicked receiver is too adversarial and puts the court at the centre of the dispute rather than as the arbiter.
How to Manage the Court Process
To ensure this negotiated settlement is binding and transparent, we propose a shift in how the court process is managed:
Formalization via Consent: Upon agreement of the terms outlined above, all parties (Cytonn, Creditor Representatives, SBM Bank, and the Official Receiver) should file a Consent Order with the court.
Supervised Accountability: We recommend that the court be invited to allow for 6-month mention intervals. This enables the parties to provide regular, documented updates to the court on the progress of the completion and repayment plan, ensuring that the process remains accountable without necessitating a return to adversarial litigation.
Conclusion
The goal of the Insolvency Act is business turnaround and value preservation. By adopting this strategy, stakeholders shift the focus from the destruction of legal entities to the creation of tangible value. Boardlot Africa Research maintains that a negotiated settlement is the only viable path to protecting the 3,000 creditors from the catastrophic losses typical of forced, chaotic liquidations.
Sultan
Boardlot Africa Research
About Boardlot Africa Research
Boardlot Africa is a premier financial intelligence and corporate governance publication dedicated to unpacking the mechanics of capital, market strategies, and structural shifts across East Africa’s corporate landscape. By bridging the gap between raw economic data and actionable market intelligence, we deliver deep-dive research, independent corporate analysis, and policy insights designed for institutional investors, boardrooms, and sharp market observers.
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