Implementing Regulation of the Bankruptcy Law

Purpose and scope

• The regulation details the Bankruptcy Law procedures: protective settlement, financial reorganisation, liquidation and the small-debtor procedures, and identifies regulated entities subject to special rules (Article 2 as amended).

Key rules, rights and obligations

• Before a vote on voluntary liquidation, the directors submit an auditor's report and updated balance sheet confirming the assets suffice to pay all debts, with a written declaration that payments continue (Article 3).
• A creditor who finds its own goods with the debtor may ask for their return if they are unchanged, no part of the price was received, and the request is made within five days of the suspension of claims (Article 30).
• The creditors' committee has at least three members appointed by the court; a candidate must have an admitted claim that is not fully secured (Article 24).
• The committee, creditors and the debtor may inspect the information and documents held by the trustee or the Bankruptcy Commission (Article 10).

Violations, penalties and common problems

• Common problems: a creditor missing the deadline to have its claim listed, the debtor's late notice to creditors, and dealing in assets during the suspension of claims.

Procedures and key deadlines

• The debtor notifies creditors of the judgment opening a protective settlement within seven days and invites them to vote; an omitted creditor must ask for its claim to be listed within fourteen days of the announcement (Article 33).
• A debtor applying for liquidation notifies creditors of the application and hearing date within seven days of filing, and a creditor may object before the hearing (Article 49).
• A small debtor prepares the proposal with the trustee within thirty days of the end of the claims period (Article 64).
• Interested parties may object before the court of appeal to specified judgments and decisions, including liability of jointly liable owners and voidable transactions (Article 80).

An advisory summary prepared by Al-Bayan Al-Wadih Law Firm. It is not an official text and does not replace the law, its implementing regulations, or advice from a specialised lawyer. The official published text and its amendments prevail.