المملكة: "Consensual structuring"..Legitimizing regulatory amendments "Bankruptcy settlement" Outside the courts
Revealed Courtsto enable troubled enterprises to regain their balance.
The new draft allows the debtor or small debtor to agree with creditors on a proactive plan to restructure debts before registering any request to open Bankruptcy procedures or judicial filing.
The amendments required the debtor to have the plan certified by a licensed bankruptcy trustee, to ensure that it meets the standards of fairness and achieves the interests of the majority of creditors before submitting it to the court.
Financial reorganization
The proposals give the court the power to ratify the “consensual plan,” which entails granting it the right to reject any subsequent requests to open bankruptcy procedures that might threaten the agreement.
In a step to enhance confidence, the proposed system stipulates that financial reorganization proposals include a minimum proceeds for creditors voting to reject.
The return offered to the objecting creditor must be equal – at least – to what he would obtain if the debtor’s assets were liquidated, to ensure that his rights are not harmed.
Bankruptcy procedures may be an opportunity to reform business methods and provide strategic solutions to overcome financial challenges.
Protecting Bankruptcy Assets
The amendments included provisions that allow the court to lift the “suspension of claims” on specific debts if it appears that this is in the interest of the general bankruptcy procedure.
The legislator introduced an exception that allows the suspension of claims to be suspended in emergency situations related to the environment, health, or public safety upon the request of the competent authorities.
This exception comes to balance protection Bankruptcy assets with public interest considerations, in line with international practices and the UNCITRAL Legislative Guide.
Administrative liquidation procedures
At the institutional level, the draft proposed granting the bankruptcy committee complete financial independence by allocating an independent annual budget to it within the state budget.
The financial income of the committee will include the financial compensation it collects in exchange for managing administrative liquidation procedures, issuing licenses, and the professional services it provides.
This administrative step aims to simulate Global models in Australia and the United Kingdom, where insolvency bodies have internal resources that enhance their operational efficiency.
- For more: Follow Khaleejion 24 Arabic, Khaleejion 24 English, Khaleejion 24 Live, and for social media follow us on Facebook and Twitter
