BAHRAIN Law and Practice Contributed by: Noor Radhi, Mohamed Ali Shaban and Mohamed Altraif, Hassan Radhi & Associates
tors. For a non-CBB Licensee, the process of invol - untary reorganisation or liquidation of its assets will be done in compliance with the Bankruptcy Law. The insolvent debtor or an interested creditor may file an action before the court requesting commencement of the reorganisation or liquidation process. The court, once convinced that the requirements set out under the law have been met, will appoint a bankruptcy trus - tee who will be mandated by the court to assist in the plan either to reorganise or liquidate the entity. 1.3 Statutory Officers The Bankruptcy Law recognises several statutory officers who play key roles in the reorganisation and liquidation processes. Temporary Bankruptcy Trustee A temporary bankruptcy trustee is appointed as a pro - visional measure after bankruptcy has been filed for but before the court approves the opening of bank - ruptcy proceedings under the Bankruptcy Law. The temporary bankruptcy trustee serves as a temporary overseer of the debtor’s assets and operations until a permanent trustee is appointed. Bankruptcy Trustee A bankruptcy trustee is selected by a majority of credi - tors within seven days of the court’s approval to open bankruptcy proceedings. If creditors fail to make a selection, the court may appoint a bankruptcy trustee. The bankruptcy trustee plays a central role in manag - ing the debtor’s assets, preparing financial reports, and assisting with the development and implementa - tion of reorganisation plans. Liquidation Trustee The liquidation trustee title is given to a bankruptcy trustee once the court approves the commencement of liquidation proceedings under the Bankruptcy Law. They are primarily responsible for protecting and maximising the value of the bankruptcy estate, selling assets, and distributing proceeds to creditors
ment of the debtor’s business and the implementa - tion of the reorganisation plan to improve the debtor’s financial position and operations. Administrator/Liquidator (for CBB Licensees) For entities licensed by the CBB, the CBB may assume administration itself or appoint an administrator to act on its behalf. The CBB or the appointed administrator can also apply to the court for the appointment of a liquidator to manage the liquidation process for CBB Licensees. Interaction with Debtor/Directors Bankruptcy trustees report directly to the court and are responsible for overseeing the debtor’s assets and operations. In reorganisation proceedings, the trus - tee works closely with the debtor’s management to develop and implement a viable reorganisation plan while also monitoring the debtor’s business activi - ties. During liquidation, the trustee takes control of the debtor’s assets and is responsible for selling them and distributing the proceeds to creditors in accord - ance with legal priorities. Selection and Appointment Bankruptcy trustees are typically selected by credi - tors at a meeting held within seven days of the court’s approval to open bankruptcy proceedings. If creditors do not make a selection, the court has the authority to appoint a trustee. Creditors have the right to request the replacement of a trustee within 30 days of their appointment. Trustees must be registered experts who are inde - pendent, impartial, and free from any conflicts of inter - est. They cannot have served as the debtor’s insider, creditor, employee, auditor, or agent in the two years prior to their appointment. For CBB Licensees, the CBB has the power to assume administration itself or appoint an administrator to oversee the proceedings on its behalf.
according to legal priority. Reorganisation Trustee
The reorganisation trustee title is assigned to a bank - ruptcy trustee during reorganisation proceedings under the Bankruptcy Law. They oversee the manage -
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