Article 50 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 50 من اللائحة التنفيذية لنظام الإفلاس · الفصل الخامس: إجراء التصفية: طلب السداد
This article of the Regulations regulates the trustee's request that the court determine which assets of the bankruptcy estate must be announced before sale, and the criteria taken into account.
Official text (Arabic)
This article has not been amended since the law was issued.
1 - يقدم الأمين طلباً إلى المحكمة بتحديد أصول التفليسة التي يجب الإعلان عنها قبل بيعها, مرافقاً له المعلومات والوثائق المحددة لذلك.
2- يراعى عند تحديد أي من أصول التفليسة, التي يجب الإعلان عنها قبل بيعها, ما يأتي:
أ - أن يكون من أصول التفليسة المؤثرة.
ب - الأثر الذي يحدثه الإعلان في قيمة ذلك الأصل.
ج - تكلفة الإعلان.
3- تحدد المحكمة وسيلة الإعلان التي تراها مناسبة.
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 50 explained in plain English
In the liquidation procedure the trustee sells the assets of the bankruptcy estate to pay the creditors. Announcing some assets in advance may be a way to attract buyers and raise the price. This article of the Implementing Regulations of the Bankruptcy Law regulates this as follows:
1- The request: the trustee submits a request to the court to determine the assets of the bankruptcy estate that must be announced before they are sold, attaching the information and documents specified for this purpose (which under Article 1 of the Regulations are those specified by the Bankruptcy Committee in coordination with the Ministry of Justice).
2- The criteria: in determining the asset that must be announced, the following are taken into account:
- That it is one of the significant assets of the bankruptcy estate.
- The effect the announcement has on the value of the asset.
- The cost of the announcement.
3- The means of announcement: determined by the court as it sees fit.
The idea is to balance benefit against cost: there is no point in a costly announcement for an asset of little significance, whereas announcing a significant asset may raise its price in the creditors' interest. The article does not define a significant asset or fix a particular amount, so the matter is left to the court's assessment under these criteria.
It is followed by Article 51, which prevents the trustee from selling any asset in dispute except after the court's approval. A creditor who is concerned about how the assets of their debtor are sold may consult a lawyer specialized in bankruptcy and commercial cases.
Practical example
In the liquidation of a factory in Jubail, the debtor owns a high-value production line and some office furniture. The trustee asks the court to determine the production line as an asset that must be announced before sale because it is significant and the announcement may raise its price, whereas the furniture does not justify the cost of an announcement. The court then determines the appropriate means of announcement.
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 50 of the Saudi Implementing Regulations of the Bankruptcy Law
Must all assets of the bankruptcy estate be announced before they are sold?
No. The trustee asks the court to determine the assets that must be announced, according to specified criteria.
What criteria are taken into account in determining the assets to be announced?
That the asset is one of the significant assets of the bankruptcy estate, the effect of the announcement on its value, and the cost of the announcement.
Who determines the means of announcing the bankruptcy estate's assets?
The court determines it as it sees fit.
More articles on Liquidation of the Debtor's Assets
- Article 3
This article of the Regulations requires the debtor's directors or board members, before a voluntary liquidation item is put to a vote, to submit an auditor's report and a written declaration to the Ministry or the Capital Market Authority.
يلتزم أعضاء مجلس إدارة المدين أو مديروه أو أعضاء مجلس مديريه أو من في حكمهم - قبل إدراج بند التصفية الاختيارية للمدين؛ للتصويت عليه في جمعية المساهمين أو جمعية
- Article 5
After registration of a request to open any liquidation procedure, the court may appoint a trustee to replace the debtor in managing its activity, or seize the debtor's assets.
للمحكمة -من تلقاء نفسها أو بناء على طلب ذي مصلحة- أن تأمر, بعد قيد طلب افتتاح أي من إجراءات التصفية، بأي مما يأتي: أ - تعيين أمين مدرج في قائمة الأمناء يحل محل
- Article 11
The trustee sells the bankruptcy estate's assets after the judgment or decision opening the liquidation procedure, or the liquidation procedure for small debtors, becomes final.
يتولى الأمين بيع أصول التفليسة بعد اكتساب حكم أو قرار افتتاح إجراء التصفية أو إجراء التصفية لصغار المدينين الصفة النهائية.
- Article 21
A natural-person debtor who has not been discharged from a remaining debt must notify creditors if he starts a profit-making activity within 24 months of ending liquidation, and apply to distribute any money that comes to him.
1- على المدين ذي الصفة الطبيعية -الذي لم يبرأ من دين متبق في ذمته- تبليغ دائنيه عند بدء ممارسته نشاطاً تجارياً أو مهنياً أو يهدف إلى تحقيق الربح خلال (أربعة وعش
- 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 48
This article of the Regulations requires that the request for payment of a debt that the creditor submits to the debtor under paragraph (2/c) of Article 93 of the Law be dated and state the amount of the debt and its cause.
يجب أن يكون طلب سداد الدين الذي يقدمه الدائن إلى المدين بموجب الفقرة ( 2 / ج ) من المادة (الثالثة والتسعين) من النظام مؤرخاً ومحدداً فيه مقدار الدين وسبب نشوئه.
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.