Article 25 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 25 من اللائحة التنفيذية لنظام الإفلاس · الفصل الثاني: أحكام مشتركة بين إجراءات الإفلاس: طلب افتتاح إجراء الإفلاس
This article sets out four cases in which a creditors' committee member's membership ends, and requires the trustee to notify the court, which may appoint a replacement.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تنتهي عضوية عضو لجنة الدائنين في الحالات الآتية:
أ- إذا حكمت المحكمة بافتتاح إجراء إفلاس للعضو.
ب- إذا تغيب عن (ثلاثة) اجتماعات متتالية دون عذر يقبله رئيس اللجنة.
ج- إذا لم يعد دائناً.
د - إذا طلب إنهاء عضويته بموجب خطاب يقدمه إلى الأمين.
2- على الأمين تبليغ المحكمة بانتهاء عضوية عضو لجنة الدائنين، وللمحكمة أن تعين بديلاً له من تلقاء نفسها أو بناء على طلب الأمين.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 25 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law explains when a member's membership in the creditors' committee ends, and what happens afterwards.
Cases in which membership ends:
- The member's own bankruptcy: If the court rules to open a bankruptcy procedure for the member.
- Absence: If he is absent from 3 consecutive meetings without an excuse accepted by the committee chair. The text requires that the meetings be consecutive and that the absence be without an excuse the chair accepts.
- Loss of creditor status: If he is no longer a creditor.
- Request to end membership: If the member asks to end his membership by a letter he submits to the trustee.
After membership ends: The trustee must notify the court that the member's membership has ended, and the court may appoint a replacement for him on its own initiative or at the request of the trustee. Appointing a replacement is optional for the court ("the court may appoint"), and the article sets no period for the notification or for the appointment.
Relation to neighboring articles:
- Article 24 regulates the formation of the creditors' committee with at least 3 members, and requires for nomination that the creditor has an accepted claim in the list of claims and that his debt is not fully secured.
- Article 26 sets out the committee's tasks, including approving the sale of any asset whose value exceeds a quarter of the value of the bankruptcy estate's assets, and gives the committee chair the power to set the time and place of its meetings.
A committee member who expects to miss meetings would do well to submit his excuse to the committee chair. To find out the effect of the end of membership in a particular case, it is advisable to consult a lawyer who specializes in bankruptcy cases.
Practical example
A member of a creditors' committee in a company's case in Medina was absent from 3 consecutive meetings without submitting an excuse accepted by the committee chair. His membership ends under this article, and the trustee must notify the court of that, and the court may appoint a replacement for him.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Active contributorFrequently asked questions about Article 25 of the Saudi Implementing Regulations of the Bankruptcy Law
When does a creditors' committee member's membership end?
If a bankruptcy procedure is opened for him, if he is absent from 3 consecutive meetings without an excuse accepted by the committee chair, if he is no longer a creditor, or if he asks to end his membership by a letter to the trustee.
Can a member resign from the creditors' committee?
Yes, by a letter the member submits to the trustee asking to end his membership.
Who appoints a replacement for a member of the creditors' committee?
The court may appoint a replacement on its own initiative or at the trustee's request, after the trustee notifies it that the membership has ended.
More articles on Creditors' Committee
- Article 15
The meeting management rules apply to any meeting of creditors or the creditors' committee held under the Bankruptcy Law or its Regulations, unless otherwise agreed.
تطبق قواعد إدارة الاجتماعات على أي اجتماع -للدائنين أو لجنة الدائنين- يُعقد بموجب أحكام النظام أو اللائحة، ما لم يتفق على غير ذلك.
- Article 24
A creditors' committee is formed by court decision with at least 3 members; the article sets out who may request it, the nomination periods and conditions, and the procedure and effect of the formation decision.
1 - يكون تشكيل لجنة الدائنين من (ثلاثة) أعضاء على الأقل من الدائنين بقرار من المحكمة من تلقاء نفسها أو بناءً على طلب الأمين أو طلب دائنين تمثل مطالباتهم ( 50 %
- Article 26
This article sets out the creditors' committee's tasks in representing the creditors, including approving the sale of any asset worth more than a quarter of the bankruptcy estate's assets, and lets its chair set the time and place of meetings.
1- تلتزم لجنة الدائنين بتمثيل الدائنين في المهمات المنصوص عليها في النظام واللائحة، وتشمل مهماتها الآتي: أ - الموافقة على بيع أي أصل تتجاوز قيمته ربع قيمة أصول
- Article 27
The chair runs the creditors' committee's meetings, a meeting is valid only if a majority of members attend, decisions pass by a majority of those present, and meetings may be held by modern technology with minutes recorded.
1 - يدير رئيس لجنة الدائنين اجتماعاتها، وله عند غيابه أن يفوض -كتابة- أحد أعضائها بذلك. 2 - لا يكون اجتماع لجنة الدائنين صحيحاً إلا إذا حضره أغلبية الأعضاء على
- Article 28
Any reasonable expenses a creditors' committee member incurs to attend the committee's meetings are paid from the bankruptcy estate's assets.
تدفع من أصول التفليسة أي مصروفات معقولة تكبدها عضو لجنة الدائنين لحضور اجتماعات اللجنة.
- Article 29
Membership of the creditors' committee does not stop a member from dealing with the debtor, as long as the dealing is in good faith and at fair value.
لا يترتب على عضوية لجنة الدائنين حظر تعامل العضو مع المدين, متى كان هذا التعامل بحسن نية وبقيمة عادلة.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.