Article 26 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 26 من اللائحة التنفيذية لنظام الإفلاس · الفصل الثاني: أحكام مشتركة بين إجراءات الإفلاس: طلب افتتاح إجراء الإفلاس
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 التفليسة.
ب - إبداء الرأي للأمين -بناء على طلبه- عند اتخاذ القرارات المتعلقة ببيع أصول التفليسة.
ج - إبداء الرأي عند إعداد المقترح ومقترح تعديل الخطة.
د - إبداء الرأي في حصول المدين على تمويل مضمون.
ه - التبليغ عن أي مخالفة للنظام أو اللائحة.
و - إبداء الرأي في إنهاء عقود المدين.
ز - أي مهمة أخرى تكلفها بها المحكمة أو تنص عليها الخطة.
2- تعقد لجنة الدائنين اجتماعاتها في الوقت والمكان اللذين يحددههما رئيس اللجنة.
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 26 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law explains the role of the creditors' committee: it is committed to representing the creditors in the tasks provided for in the Law and the Regulations, and its tasks include:
- Approving the sale of any asset whose value exceeds a quarter of the value of the bankruptcy estate's assets.
- Giving its opinion to the trustee, at his request, when decisions are made on selling the bankruptcy estate's assets.
- Giving its opinion when the proposal and any proposal to amend the plan are prepared.
- Giving its opinion on the debtor obtaining secured financing.
- Reporting any violation of the Law or the Regulations.
- Giving its opinion on terminating the debtor's contracts.
- Any other task the court assigns to it or the plan provides for.
Approval and opinion: The text distinguishes between "approval" of the sale of an asset whose value exceeds a quarter of the value of the bankruptcy estate's assets, and "giving an opinion" on the other matters. The article does not say how binding the opinion given by the committee is.
Meetings: The committee holds its meetings at the time and place set by the committee chair.
Relation to neighboring articles:
- Article 27 regulates how the committee's meetings are run: the chair runs them and, when absent, may delegate a member in writing; a meeting is valid only if a majority of the members at least attend; decisions are issued by a majority of the votes of those present; and meetings may be held by modern technology.
- Article 25 sets out the cases in which a committee member's membership ends.
A committee member or creditor who wants to know what the committee can do in a particular procedure is advised to consult a lawyer who specializes in bankruptcy cases.
Practical example
A trustee in the liquidation of a plastics factory in Dammam wants to sell a production line whose value exceeds a quarter of the value of the bankruptcy estate's assets. Under this article, this sale falls within the committee's task of approval, so it is not limited to asking for its opinion.
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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Frequently asked questions about Article 26 of the Saudi Implementing Regulations of the Bankruptcy Law
What are the powers of the creditors' committee in bankruptcy?
It represents the creditors, approves the sale of any asset worth more than a quarter of the bankruptcy estate's assets, gives its opinion on selling assets, the proposal, secured financing and terminating the debtor's contracts, reports violations, and carries out what the court assigns or the plan provides.
Does selling a large asset of the bankruptcy estate need the creditors' committee's approval?
Yes. One of the committee's tasks is to approve the sale of any asset whose value exceeds a quarter of the value of the bankruptcy estate's assets.
Who sets the time and place of a creditors' committee meeting?
The committee chair.
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 25
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.
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 ال
- 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.