Directors' Disqualification in Northern Ireland and the state of bankruptcy law in the UAE
At a time when English and Welsh approaches to director disqualification seem to be tainted with underfunding and various other problems (see for example the recent posts on Farepak) our cousins in Nortern Ireland are apparenly ramping up efforts to disqualify miscreant (or unfit) directors. See the two stories in the Belfast Telegraph here and here.
Meanwhile, the Lawyer has an interesting piece on the UAE. The article includes a synopsis of the current state of UEA insolvency law which notes:
Lawyers in the UAE are also close to seeing a draft of the updated bankruptcy law, which has been in the works for about three years. It should be in their hands by the end of the year, Justice Minister Hadef bin Juan al-Dhaheri said in May. It would finally give companies that run into trouble in the UAE the legal mechanisms to be rescued, rather than being wound up, though it is not expected to apply to government entities or companies set up within the economic free zones.
Insolvency has been a concern for many people since 2009, when the debt crisis brought a number of companies in the UAE, particularly Dubai, to their knees. One of the world’s largest port operators, Dubai World, had to engage in a $26bn debt restructuring and lawyers found the lack of a coherent restructuring regime a headache.
Indeed, a Hawkamah (the Dubai-based institute of corporate governance) study found that, on average, it took just over five years to wind up a business in the UAE and that creditors can expect to recover only about 10 cents in the dollar.
“This move is to be welcomed,” says Emma Giddings, Norton Rose Abu Dhabi-based partner. “The current insolvency regime in the UAE is little used and provides for a court-driven approach. As a consequence, there’s often uncertainty as to how the existing regime will work in practice. We understand the new law will contain alternatives to formal insolvency proceedings intended to promote the rehabilitation of companies in financial difficulties and will generally implement a more modern, debtor-friendly approach to insolvency.”
Ali Khasawneh says: “The most important aspect of the new insolvency law is that it will, hopefully, provide a more developed regime to cover more insolvency options for companies in financial difficulties.
“Now, in practice, a company’s options are quite limited. It can either enter voluntary liquidation or court-managed liquidation, which is fine but presents strict options. The new law is designed to allow companies greater protection and provide a system where they can get back on their feet."
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