“Al-Khaleej” Makes History by Declaring Bankruptcy for Debtor Owing 337 Million Dirhams

The Dubai Commercial Court of Appeal recently upheld the declaration of bankruptcy of a debtor who owed 337 million dirhams. The debtor was unable to settle his debts, leading to the seizure of all his property, which was then distributed to creditors. According to court documents, the debtor requested the opening of bankruptcy procedures in April 2023 due to his financial instability and inability to pay debts for 30 working days. After evaluating the debtor’s financial situation, the court accepted the request to open bankruptcy proceedings in November 2023.

The bankruptcy trustee initiated legal procedures and listed three creditors, including banks within the state, with a total amount of 337 million dirhams. Two bank agents objected to the case, stating that the necessary data and documents were incomplete. However, the court of first instance ruled to declare the debtor bankrupt, initiate sale and liquidation procedures, and restrict the debtor from managing his finances.

The court’s ruling was appealed by the two banks, who argued that the case should not be accepted due to incomplete information. The court considered the appeal and upheld the decision to declare the debtor bankrupt based on the evidence presented, including an expert report. The court found that the debtor was unable to continue business activities and was not willing to pay debts, leading to the declaration of bankruptcy.

In summary, the court’s decision to uphold the bankruptcy declaration of the debtor was based on the evidence presented, including financial instability and inability to pay debts. The debtor’s property was seized and distributed to creditors, following legal procedures outlined in the Bankruptcy Law.