In a first of its kind case, the court restructured a company to allow it to pay off its considerable debts
The Abu Dhabi Judicial Department has saved a company from bankruptcy through restructuring in a first of its kind case, the department announced on Tuesday.
The case in the Abu Dhabi Court of First Instance highlighted the inability of a limited liability to pay of its debts, which exceeded its available capital 18 times.
The company, which was founded in 2008 to carry out contracting work, filed a request to open bankruptcy proceedings.
As per a 2016 law, the court restructured a company and appointed a secretary and relevant experts. The secretary was on hand until the process was completely and the company paid off all its debts, renewed its commercial license and achieved a liquidity level of five times the company’s capital, allowing it to resume business.
Federal Law No. 9 of 2016 aims to assist troubled companies and protect creditors’ funds. Chapter 4 of the law regulates a debtor’s restructuring if possible, by assisting them in implementing a restructuring plan, publicising the debtors’ bankruptcy and fairly liquidating their assets to help them meet their obligations.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.