Preparing a bankruptcy report
In 2016, the United Arab Emirates drafted and promulgated a bankruptcy law that aims to protect the rights of all parties (creditors and debtors). This law protects the commercial enterprise in general, and the law has been concerned with facilitating the mechanism for fulfilling long-term obligations for debtors, which helps them to survive. Within the state and continue their activities and not affected by default.
Bankruptcy Law No. (9) of 2016 is considered a lifeline to the challenges facing companies and businesses in the UAE, as it provided protection for businessmen and investors in the country. The law helps reduce market manipulation without financial cover.
The law helps the defaulters in restructuring the business for the debtor, as the law provides a set of ways to avoid bankruptcy and liquidate funds as it includes reorganizing money outside the courts, and securing the preventive composition from bankruptcy, and financial restructuring, as this law allows the ability to obtain a new loan, but Under conditions stipulated by law.
Who are the bodies to which the bankruptcy law applies:
Whoever is classified as a trader based on the provisions of the law.Free zone companies that are not subject to special provisions regulating bankruptcy procedures.
Federal government-owned companies that have not been established in accordance with the Companies Law, and their legislation and articles of association stipulate that they are subject to the bankruptcy law.
And also all companies that are subject to Federal Commercial Companies Law No. (2) of 2015.
Companies of a professional nature with a civil license.
Among the most important points of the new law:
It provides for the establishment of a committee for financial restructuring, as the Council of Ministers assigned it to manage the restructuring process by the competent financial institutions.
The procedures that we describe by law for debtors in difficulty?
The law’s reference to the conciliation aspect preventing bankruptcy, as it aims to help the debtor reach compromise settlements between him and Dante and return his debts instead of filing bankruptcy. Debtors may not default on their debts for a period of up to 30 days.
The law stipulates with regard to appointing a trustee if the court decides to accept a composition that prevents bankruptcy in this case, it must appoint a trustee, and he must be one of the natural or legal persons named in one of the provisions of the law.
The clause of appointing observers was mentioned in Article (29) of this law that the court may appoint one or more observers from among the creditors who nominate themselves as observers to supervise the implementation of the Protective Composition procedures.
The text of Chapter Five of the Law in Article (31) stipulated the prohibition of disposing of funds for the debtor as of the date of the decision to open the procedures.
And the reference to Chapter Six of the Law on the cessation of judicial procedures and the validity of interest, the decision to open the procedures, and to the point of approval of the Protective Composition Plan, shall lead to the cessation of lawsuits, judicial procedures, and judicial execution procedures on the debtor’s funds, unless the court decides.
Obtaining new financing:
I mentioned in Article (181) of the law that the court can allow the debtor to obtain a new financing with or without guarantee, on the basis that the new financing is the priority provided that between the ordinary existing in the debtor’s possession at the date of the decision to open the procedures, and also the possibility of securing the new financing with any mortgage. Of the debtor’s unencumbered property. And the possibility of securing the new financing by arranging a mortgage on the debtor’s mortgaged funds whose value exceeds the value of the debt secured by the previous mortgage,
Parties interested in law:
- The creditor.
How does the International Auditing & Consultancy Center assist its clients in submitting a report and preparing a bankruptcy report:
The International Auditing & Consultancy Center ,provide assistance in preparing the bankruptcy report, and determining the reasons, That caused the imbalance in the financial position, as well as identifying the current financial position of the debtor and analyzing it in proportion to each activity separately with assistance in developing a restructuring plan and getting out of the crisis with, the possibility Return of the debtor’s activity to profitability ,and provide a detailed report on the debtor’s financial position with listing and classifying debts as well as assets in accordance with the law. Preparing a bankruptcy report