UAE Law and Practice Contributed by: Abdelhak Attalah and Ghassan Hidar, Attalah Legal Consultancy
Controller The controller prepares reports on the progress of the procedures when requested by the Bankruptcy Court, without interfering in the procedures. If a legal entity is designated as a controller, it must nominate one or more representatives to assume the duties of the controller, with the entity remaining responsible for its representatives. 4.6 The Position of Shareholders and Creditors in Restructuring, Rehabilitation and According to Article 90, a creditor may submit a rea - soned request to the Bankruptcy Court to prevent the debtor, its board of directors or its managers from managing its assets and business, and to transfer such management to the trustee. Under Article 98, all creditors must submit their debt documents to the trustee within the timeframe speci - fied in the invitation addressed to them, regardless of whether their debts are due, secured by a mortgage or lien, or fixed by final provisions. Reorganisation Roles of Creditors The New Bankruptcy Law states that the creditors have the right to participate in the reorganisation pro - cess through their involvement or representation in the creditors’ committee and the Restructuring Plan Approval Meeting. Claims of Dissenting Creditors The New Bankruptcy Law stipulates that the Bank - ruptcy Court must consider the objections of credi - tors who believe their interests are not being ade - quately addressed in the restructuring proceedings. For example, Article 117 states that any dissatisfied creditor has the right to challenge the decision to ratify an amended plan. However, once the required majority approval is obtained, the reorganisation plan is ratified by the Court after hearing the dissenting creditors. The plan becomes enforceable against all creditors, including those who dissent.
Trading of Claims Against a Company The New Bankruptcy Law does not explicitly prohibit the assignment of rights, thus allowing a creditor to assign its claims to a third party at any stage of the proceedings. Consequently, the rights of a creditor assignor can be transferred ipso jure to its succes - sive assignee, in accordance with the general rules set forth in Articles 1106, 1109 (1) and 1110 of the Civil Transactions Law. Existing Equity Owners Although shareholders’ rights remain unaffected unless the business is terminated during liquidation, Article 227 stipulates that, after the decision to com - mence proceedings, the debtor or the trustee cannot distribute profits to shareholders and partners without the permission of the bankruptcy court. 5. Statutory Insolvency and Liquidation Procedures 5.1 The Different Types of Liquidation Procedure Application Submissions By the debtor The debtor can apply to the Bankruptcy Administra - tion for bankruptcy within 60 days of ceasing pay - ments or recognising the inability to pay debts, provid - ed no creditor or supervisory entity has applied within this timeframe. Late submissions are still acceptable. By creditors Creditors can request bankruptcy if the debtor fails to pay a clear, undisputed debt that meets the legal minimum, following a 30-day payment warning to the debtor. By supervisory entities Supervisory entities can apply for bankruptcy for debtors under their supervision, presenting evidence of financial distress and allowing the debtor 30 days to respond. Late submissions remain valid. Multiple applications If multiple applications are submitted for the same debtor, they will be combined. Restructuring applica - tions take precedence over bankruptcy ones, and the
486 CHAMBERS.COM
Powered by FlippingBook