Following the global “rescue” trend, the Committee of Financial Restructuring is established (to hold a list of approved insolvency experts and a register of insolvencies, and to oversee restructurings that occur outside the court system).
Therefore, three new procedures are defined:
- Protective composition – to rescue not-yet-insolvent businesses. This court-led procedure requires a debtor submitting a request for composition of bankruptcy to the court in order to reach an agreement with its creditors under a composition plan with supervision from the court that has to be approved by the court (provided the debtor has ceased to pay its debts for more than 30 days). Enforcement deadline, 3 years
- Insolvency with restructuring – for insolvent debtors that are capable of rescue by restructuring. Minimum due amount is Dh 100,000. Implementation deadline, five years from the approval by the court.
- Insolvency and liquidation – this is the residual procedure, if the other 2 didn’t work. The court issues an order to wind up the company if bad faith is proved. Employees with unpaid wages become per se preferential creditors.