Saudi Cabinet approves amendment to information rules of bankruptcy law

Cabinet meeting under the leadership of King Salman

Saudi Cabinet approved, on Jan. 8, amendment to the information and documents rules stipulated in the Bankruptcy Law, to be effective from the publication date.

Any application for the commencement of any protective settlement and financial restructuring procedures, filed by the debtor, should be accompanied with the following:

1) A brief description of the business and a copy of its license (if any), as well as a copy of the corporate debtor’s articles and memorandum of association, and amendments of each of them (if any)

2) A proof that the debtor is bankrupt, distressed or is likely to suffer financial distress

3) A brief description of the debtor’s financial position during the 24 months preceding the application and the effects of the economic situation

4) The financial statements if the debtor is a corporate person for the past two fiscal years preceding the application

5) The financial statements if the debtor is a natural person, if previously prepared, for the past two fiscal years preceding the application

6) A list of the debts owed by the debtor provided that such a list includes the following:

a) The debt’s value, origin and due date, as well as the supporting documents

b) The creditor’s name, number of identity card or commercial registration, address and contacts

c) A statement of the secured debts and the security type

d) The debtor’s list of assets and an evaluation of the aggregate value, provided that it is prepared no later than one month before the date of submitting the application

e) The data of the debtor’s personnel and the total of their monthly wages and salaries

f) A statement of the lawsuits, legal proceedings, judgments and executive deeds related to the debtor, and the supporting documents

Any application for the commencement of any bankruptcy procedure should also include the following

1) The information and documents provided for in Article (5), excluding the provisions of Paragraph (b) of the same Article, evidence shall be submitted to prove that the debtor is bankrupt or distressed

2) Evidence of the likelihood of the debtor’s inability to continue his business, with an indication of the impact of any pandemics, emergency circumstances or lawsuits on its financial position and the possibility of continuing the activity when this effect ceases to exist

3) A statement of any of the following actions taken by the debtor during the 24 months prior to submitting the application - with any party:

a) Assigning, in whole or in part, any of its assets, rights, or provided securities

b) Concluding a transaction that includes settling debts before their maturity dates or settling them unfairly

c) Providing securities to debts before evidencing that he is so indebted

d) Discharging its debtor, in whole or in part, of a debt