Okaz/Saudi Gazette

RIYADH — The Bankruptcy Committee has received 16 judicial decisions issued by five commercial courts with regard to liquidation, financial restructuring, and administrative liquidation lawsuits during the last one month period.

Okaz/Saudi Gazette has learned from sources that the commercial courts in Riyadh, Dammam, Madinah, Jeddah, and Abha have issued decisions regarding the rescheduling of bad debts, addressing any financial or administrative difficulties, and protecting creditors' assets. The Bankruptcy Committee is examining decisions issued for medical, operation, and maintenance companies, construction and development companies, contracting and aviation companies, minerals materials companies, a medical complex, and engineering companies, as well as contracting, industrial, and industrial mineral materials companies, and a car rental company.

According to the sources, the Bankruptcy Committee announced the names of a number of creditors who could not be notified due to the lack of contact information and a lack of response. These creditors include three government entities. In sessions held virtually, the Bankruptcy Committee announced to creditors that commercial courts in Riyadh, Dammam, Madinah, Jeddah, and Abha had issued rulings initiating administrative liquidation procedures, and financial restructuring procedures, as appropriate, for each company.

The Bankruptcy Committee called on creditors to submit their claims within a period not exceeding 60 days. Creditors should submit their claims against the debtor using the claims service on the committee's website, ensuring that the creditor's claim form is completed, signed, and attached to the claim documents. The Bankruptcy Committee has initiated procedures to enable bankrupt or distressed debtors, or those expected to suffer financial distress, to benefit from procedures to regulate their financial situation and resume their activities, while respecting the rights of creditors. Several court rulings have been issued initiating administrative liquidation procedures, financial restructuring, debt rescheduling, and other rulings appointing trustees to conduct the liquidation of distressed companies.

Lawyer Saad Misfer Al-Maliki said that the Bankruptcy Law is formulated as part of the legislative measures to safeguard rights and improve the investment environment in general. He said that the law aims to regulate procedures, including preventive settlement, financial restructuring, liquidation, preventive settlement for small debtors, financial restructuring for small debtors, liquidation for small debtors, and administrative liquidation.

The Bankruptcy Law defines a bankrupt person as a debtor whose debts have consumed all of his assets. A defaulter is defined as a debtor who has failed to pay a debt on its due date.

Al-Maliki said that the law stipulates the formation of a committee called the Bankruptcy Committee, which enjoys financial and administrative independence. It is responsible for establishing, maintaining, and managing the bankruptcy registry, licensing bankruptcy trustees and experts in accordance with the regulations, preparing a list of bankruptcy trustees and experts, and issuing regulatory rules, inspections, and verifications related to any bankruptcy procedures.

Al-Maliki explained that the law has identified four main procedures aimed at achieving its overall objectives. The first is the preventive settlement procedure, which aims to facilitate the debtor's reaching an agreement with his creditors to settle debts, while the debtor retains control over his business. The second procedure is the financial restructuring procedure, which aims to facilitate the debtor's reaching an agreement with his creditors to restructure his business financially under the supervision of a financial restructuring trustee.

The third is the liquidation procedure, which aims to limit creditors' claims, sell the bankruptcy assets, and distribute the proceeds to creditors under the management of a liquidation trustee. The fourth procedure aims to sell bankruptcy assets whose sale is not expected to generate sufficient proceeds to meet the costs of the liquidation procedure.