UAE Law and Practice Contributed by: Abdelhak Attalah and Ghassan Hidar, Attalah Legal Consultancy
Within ten days of the restructuring plan being approved or rejected by the required majority, the trustee must notify the Bankruptcy Administration and, if applicable, the Bankruptcy Unit. This notifica - tion includes the approved or rejected plan, meeting minutes and attendance records. If approved, the plan must be ratified by the Bankruptcy Court. Within ten days of receiving the trustee’s notification, the Bankruptcy Administration must inform the debtor and all creditors about the decision and its accompa - nying documents. If the restructuring plan is rejected, the Bankruptcy Court may, within ten days of being notified, either: • ratify the rejected plan upon the debtor’s request, ensuring creditors’ rights are not diminished com - pared to bankruptcy proceedings, after consulting the trustee and hearing creditors’ objections; or • terminate the restructuring procedures upon request from the debtor, supervisory entity or credi - tors, adhering to the procedures outlined in the law for opening bankruptcy adjudication. During the validity of the restructuring plan and until its completion, the trustee oversees its implementation. If the debtor is under a supervisory entity, co-ordination between the trustee and the Bankruptcy Unit is man - dated for supervision, as per Article 116 of the law. Upon request submitted during the ratification period of the restructuring plan and before its completion, the Bankruptcy Court may decide to terminate restructur - ing procedures under two conditions: • the debtor requests termination due to no longer meeting restructuring criteria or an inability to implement the plan as specified; or • the debtor or supervisory entity requests to initiate bankruptcy adjudication procedures. Within ten days of receiving the termination request, the Bankruptcy Administration notifies creditors and the trustee. The Bankruptcy Court then decides to approve or reject the request within ten days of sub - mission.
If the Bankruptcy Court decides to terminate restruc - turing procedures, it may decide to initiate bankruptcy adjudication procedures, upon request from the debt - or, trustee, supervisory entity or creditors. Within ten days of issuing this decision, the Bankruptcy Adminis - tration announces and registers it as per Article 35 of the law, with registration in the Bankruptcy and Com - mercial Registers deemed sufficient. 4.3 The End of the Restructuring, Rehabilitation and Reorganisation Procedure Restructuring or Reorganisation Agreement All proposals accepted by a majority of creditors must be ratified by the Bankruptcy Court, ensuring fairness. The reorganisation plan should aim for the best results for creditors while treating all parties impartially. The trustee, with court approval, can rescind con - tracts that are unfavourable to the debtor’s assets. The trustee may also request the court to assign or nullify contracts that are deemed fraudulent or harm - ful, and to nullify actions granting certain creditors preferential treatment, unless these actions are within the normal course of business, involve fair and rea - sonable transactions, or do not diminish the debtor’s assets available for creditors. Failure to Observe the Terms of Agreements Pursuant to Article 118, if the debtor anticipates that the restructuring plan will not be implemented as per its terms, the Bankruptcy Court may decide to termi - nate the restructuring proceedings, upon a request submitted within the period following the decision to ratify the restructuring plan but before its full imple - mentation. A claims moratorium will commence the day after the issuance of a decision to initiate restructuring proce - dures, and will remain in effect until the restructuring plan is ratified or the Bankruptcy Court decides to terminate the restructuring procedures. According to Article 89, once the restructuring procedures are initi - ated, the debtor will continue to manage its business and assets under the supervision of a trustee. The debtor may perform all necessary commercial activi - 4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation
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