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.
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