Key Highlights:

• A specialised division within the Courts, led by a senior court of Appeal Judge, is designated to managing bankruptcy and restructuring proceedings.

• The New Law replaces the previous mechanism of Bankruptcy Preventive Composition with an alternative termed ‘Preventive Settlement’. This empowers debtors to negotiate with creditors while handling their business without the appointment of a trustee. Also, they can benefit from a moratorium period of 3 to 6 months from the acceptance of the petition.
• Secured creditors have the right to enforce against assets during bankruptcy proceedings through the Bankruptcy Court, simplifying the process and avoiding separate enforcement proceedings.
•  Bankruptcy Court decisions shall be deemed a writ of execution and immediately enforceable, under Article (8) of the New Law. However, Bankruptcy Courts will have the power to suspend the execution of these decisions under specific circumstances.
• Unlike the Old Law, were only judgments pertaining to accepting and rejecting the claim can be appealed, all decisions issued from the Bankruptcy Court will be subject to appeal within 30 days from the date of issuance of the relevant judgment.
• Article 12 of the New Law establishes a specialized Bankruptcy Unit within the courts, providing a vital support to the Bankruptcy Court. The Financial Restructuring Committee retains its importance, expanding its mandate and covering various aspects of the bankruptcy process.

The aim of the New Bankruptcy Law is to:

•  Avoid long-term financial distress, allowing the debtors to organize the preservation of their business assets and enabling them to continue operating.
• Protect creditors from high risks and support the economic stability while challenging financial situations.