What Are the Seven Procedures Under the Saudi Bankruptcy Law?
The Saudi Bankruptcy Law provides seven principal procedures. Each guide explains the procedure, its purpose, who may use it, the main stages and common questions.
The Seven Procedures
What Is Preventive Settlement and How Is It Filed?
Preventive settlement allows a debtor to reach an agreement with creditors while retaining management of the business. Only the debtor may file the application, and the Commercial Court considers it within no more than forty days from registration.
What Is Preventive Settlement for Small Debtors?
This simplified procedure enables a debtor whose total debts do not exceed SAR 2 million to reach an agreement with creditors through an efficient, lower-cost process while retaining management of the business.
What Is Financial Reorganization and Who May Apply?
Financial reorganization restructures the debts of a distressed debtor to support business continuity. The debtor, a creditor or the competent authority may apply, and the court considers the application within no more than forty days.
What Is Financial Reorganization for Small Debtors?
This procedure restructures a small debtor's debts through a simplified and lower-cost process under a bankruptcy trustee's management. It applies where total debts do not exceed SAR 2 million.
What Is Liquidation and Who May Request It?
Liquidation is used to collect and sell bankruptcy assets and distribute the proceeds to creditors under a trustee's management. The debtor, a creditor or the competent authority may apply, subject to the statutory conditions.
What Is Liquidation for Small Debtors?
This simplified procedure sells a small debtor's bankruptcy assets and distributes the proceeds to creditors under a trustee's management. It applies where total debts do not exceed SAR 2 million.
What Is Administrative Liquidation and When Is It Used?
Administrative liquidation applies when the proceeds expected from selling the debtor's assets are insufficient to cover the costs of ordinary or small-debtor liquidation. The debtor or competent authority may apply.