The Abu Dhabi Judicial Department managed to help a company out of bankruptcy, after the success of the restructuring process that it underwent before the Bankruptcy Division of the Abu Dhabi Commercial Court, in accordance with the effective legal procedures provided by Federal Decree-Law No. 9 of 2016 regarding bankruptcy and its amendments, with the aim of addressing the conditions of companies. and the protection of creditors’ funds, in a manner that enhances the protection of the economic activity and investment climate of the state.
This is the second incident of its kind at the regional level, which are being considered by the competent courts in Abu Dhabi, where a creditor submitted an application to commence bankruptcy declaration procedures in accordance with the provisions of Chapter Four of the Bankruptcy Law, as a result of the failure of a limited liability company specialized in the field of general contracting to pay its debts following a financial distress.
During the course of the procedures, a group of other creditors submitted their debt claims, with a total value of 76,104221 dirhams, and a draft restructuring plan was prepared, which was voted in by 71.54% of the creditors, with a debt value of 71.89% of the total debt, in order for the debtor company, with the assistance of a specialized expert and under the supervision of the Abu Dhabi Commercial Court, could pay the debts and disburse a surplus amount to the company estimated at 5 million and 400,000 dirhams, while maintaining its in-kind assets with an estimated value of about 15 million and 168 thousand dirhams.
Restructuring is the most effective means provided by Federal Decree-Law No. 9 of 2016 regarding bankruptcy and its amendments, as it provides a forum for dialogue between the debtor and the group of creditors, with the assistance of an expert and under the supervision of the competent court, to discuss ways to confront challenges, according to dynamic, organized and interactive techniques aimed at directing the dialogue in the direction of Constructive contributes to finding the optimal collective solution for the payment of obligations in a manner that achieves the common interests of all parties.
It should be noted that the restructuring procedures begin with limiting the claims to the debtor, determining his financial position, and studying the reasons for his failure to pay his debts, followed with the debtor and the competent expert preparing the draft restructuring plan, which is presented to the court for review, and in the event of approval, it is presented to all creditors for a vote. The restructuring plan is not imposed on the creditors unless the majority of them agree in terms of their number and the value of their debts.