ICEC

Legal lifeline for bankrupt firms

Dubai: Bankruptcy proceedings have an inevitable air of finality about them. They dissect the circumstances that led a business to crash and burn. What often remains unsaid are the dashed hopes and aspirations of the promoters and employees alike.

In other words, there was no option of a second chance. Not anymore, if the proposed UAE Bankruptcy Law comes into effect with full force.

For the country’s small and medium-sized businesses the new law does give them some time to try to turn things around.

And time is, no doubt, of the essence.

According to legal sources, the law states that during the bankruptcy declaration procedure, the court-appointed trustee must prepare and submit a report stating whether there is a reasonable possibility to reorganise the business.

The court will then hold a hearing of the debtor and creditors and either assign the trustee to prepare a reorganisation plan for the business or issue an order for liquidation.

Source: gulfnews

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