The company is undergoing a high-profile restructuring process to help pay off its debts
The Abu Dhabi Judicial Department successfully helped a company emerge from bankruptcy after the successful restructuring process it underwent before the Bankruptcy Division of the Abu Dhabi Commercial Court.
The initiative was in accordance with the legal procedures in force provided for by the Federal Decree-Law No. 9 of 2016 on Bankruptcy and its amendments, with the aim of remedying the conditions of the companies. It also protects creditor funds in a way that further protects the state’s economic activity and investment climate.
This is the second such incident at the regional level, which the relevant courts are considering in Abu Dhabi. In such cases, a creditor seeks to initiate bankruptcy proceedings under the provisions of Chapter Four of the Bankruptcy Act, after the failure of a limited liability company specializing in the field of general contracting to pay his debts due to financial difficulties.
During the proceedings, a group of other creditors presented their claims, with a total value of more than 76 million dirhams, and a draft restructuring plan was prepared, which was voted by 71.54 percent of the creditors, with a debt value of 71.89% of the total debt. The debtor company, with the assistance of a specialized expert and under the supervision of the Abu Dhabi Commercial Court, was able to pay the debts and disburse an excess amount to the company estimated at Dhs 5,400,000 while maintaining its assets in kind with an estimated value of more than 15 million Dh.
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Restructuring is the most effective means provided by the Federal Decree-Law No. 9 of 2016 on Bankruptcy and its amendments, as it provides a forum for dialogue between the debtor and the group of creditors, with the assistance of a expert and under the supervision of a competent court, to discuss ways of dealing with disputes.
It should be noted that restructuring procedures begin with limiting claims on the debtor, determining his financial situation and studying the reasons for his non-payment of debts. The debtor and the competent expert then prepare the draft restructuring plan, which is presented to the court for review, and if approved, it is presented to all creditors for a vote. The restructuring plan is only binding on creditors if the majority of them agree on the number and amount of their debts.