Dubai Economy confirmed that small and medium-sized companies and entrepreneurs are the biggest beneficiaries of the bankruptcy law. During the "Market Dialogue" session organized by the department in cooperation with its media partner, Emirates Today newspaper, it called on the troubled companies to start immediately the procedures of bankruptcy protection, explaining that companies that are troubled by the outbreak of the emerging Corona Virus (Covid 19) can reach their debts and reach their debts. To more than 100 thousand dirhams, take advantage of the bankruptcy law, and restructure its financial conditions.
Bankruptcy law
In detail, Khalid Mubasheri, Executive Director of the Governance and Legislation Sector in the Dubai Economy, said that the bankruptcy law No. (9) of 2016 in the UAE raises the level of state competitiveness in the World Bank Index to start business, pointing out that it organizes and specifies the legal tools necessary to restructure debt Companies, to avoid bankruptcy cases, by taking the necessary measures, before reaching the stage of stopping the payment of creditors' dues.
He explained that bankruptcy does not mean facing financial difficulties, but the creditor is exposed to bankruptcy procedures after stopping the payment of his debts, and therefore companies must remedy their financial position, before reaching the stage of stopping the payment of financial obligations.
The influence of "Covid 19"
Mubasheri said, during the "market dialogue" session, that small and medium-sized companies and entrepreneurs are the biggest beneficiaries of the bankruptcy law.
He explained that the troubled companies due to the crisis of the outbreak of the new Corona virus (Covid 19), and their debts amounting to more than 100 thousand dirhams, can benefit from the bankruptcy law and restructure their financial conditions.
He pointed out that the law applies to the natural person, the trader who owns a commercial license, and includes all parties, and all legal forms of companies that conduct business in the state, in addition to civil companies, companies and institutions operating in free zones, which are not subject to a bankruptcy regulation.
the majeure force
He stressed that companies and entrepreneurs in the UAE can take advantage of the emergency conditions and "force majeure" clause in the Civil Transactions Law, calling on troubled companies in the UAE to start immediately procedures for bankruptcy protection, according to the bankruptcy law, before reaching the stage of stopping Paying debts.
He continued: «The bankruptcy law enables companies to reach amicable settlements with creditors, and gives a sufficient period for companies to pay off their obligations and continue in their business, as the law protects investors and entrepreneurs and is not a punishment for them.
Rights protection
During the session moderated by the director of the Governmental Communication Department in the Dubai Economy, Mariam Al-Afridi, and attended by journalists and entrepreneurs, Mubasheri stressed that the bankruptcy law protects the rights of creditors and debtors, as it enables debtors to fulfill their obligations, continue their business, and helps entrepreneurs whose business businesses have been affected. As a result of the outbreak of the Corona pandemic, it provides them with protection in the market, in addition to helping companies facing financial difficulties, and those whose debts exceed 100 thousand dirhams, and includes clear procedures for implementing bankruptcy protection, financial restructuring, developing new financial resources, and liquidating Troubled and debtor companies.
Timetable
He stated that the law includes an organized schedule to assist companies in difficult financial situations, as debtors benefit when they start bankruptcy procedures, or other procedures within 30 days, from protection from criminal penalties, and from claims filed against them by creditors.
He stressed that the law thus protects the rights of creditors and the interests of defaulted merchants together, as well as reorganizes the companies ’business, in order to facilitate the procedures for registration and exit, and gives them a deadline to reach the judicial conciliation, and re-arrange the debtors’ conditions, in a way that guarantees creditors access to their financial dues.
Amending the provisions of "bankruptcy"
His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the State, last December issued a decree of Federal Law No. 23 of 2019, which included amending some provisions of the current bankruptcy law, No. 9 of 2016.
The amendments included items in 34 articles, which came in their entirety to facilitate procedures, guarantee the rights of creditors and employees, as well as preserve the continuity of the debtor's business, and do not harm it, and give more opportunity to troubled projects.
The most important amendments included granting creditors with debt secured by pledging the right to implement their collateral, whenever their debts were due, provided that the court makes sure that there is no collusion between the debtor and any of the creditors who have collateral. The deadlines for all the debts of a bankrupt debtor, whether they are ordinary debts or collateralized by a mortgage, or excellent debts fall due to the issuance of a ruling declaring the debtor bankruptcy and liquidation of his money.