Abu Dhabi judiciary saves a company from declaring bankruptcy

The Abu Dhabi Judiciary has successfully assisted a company out of bankruptcy protection under the effective legal process under Federal Decree No. Decree No. 9 of 2016 on Bankruptcy and its Amendments, aimed at addressing the situation of companies. Protect creditors’ funds in a way that strengthens the protection of the country’s economic activity and investment climate.

This is the second such incident at the regional level being considered by the competent court in Abu Dhabi, where a creditor has filed an application for the commencement of bankruptcy declaration proceedings under Chapter IV of the Bankruptcy Code, as a result of a limited The responsible company failed to pay its debts after financial distress.

During the procedure, a group of other creditors submitted their claims with a total value of AED 76,104,221 and prepared a draft restructuring plan, which was voted by 71.54% of the creditors, with the value of the claims being 71.89% of the total debt, in order to allow the debtor to The company, with the assistance of professional experts and under the supervision of the Abu Dhabi Commercial Court, repays its debts and pays the company an estimated surplus amount of AED 5 million and AED 400,000, while retaining its estimated value of approximately AED 15 million and AED 168,000 of real assets.

Reorganization is the most effective means provided by Federal Decree No. 9 of 2016 on Bankruptcy and its amendments, as it provides a forum for dialogue between groups of debtors and creditors, with the assistance and supervision of competent Conversations develop dynamic, organized and interactive techniques in a constructive direction to discuss approaches to challenges, helping to find the best collective solution to paying debts in a way that achieves the mutual benefit of all parties.

It should be noted that the reorganization process starts with limiting the debtor’s claims, determining its financial situation, studying the reasons for its failure to repay the debt, and then preparing a draft reorganization plan by the debtor and competent experts, which is submitted to the court for review and, upon approval, to all creditors. vote. A restructuring plan will not be imposed on creditors unless a majority of creditors agree on the amount and value of the debt.

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