Article 54 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 54 من اللائحة التنفيذية لنظام الإفلاس · الفصل الخامس: إجراء التصفية: طلب السداد
This article specifies what the decision to distribute to creditors in liquidation must contain, and allows the trustee to ask the court to amend it.
Official text (Arabic)
This article has not been amended since the law was issued.
1 - يجب أن يتضمن قرار التوزيع على الدائنين الآتي:
أ - بيان أصول التفليسة المبيعة وحصيلة بيعها.
ب - بيان طريقة توزيع حصيلة بيع أصول التفليسة وتاريخ التوزيع.
ج - أسماء الدائنين والمبالغ المخصصة لكل منهم بناء على أولوياتهم، مع مراعاة ما سيحسم من أرباح المستحقات المستقبلية في حال السداد المبكر عند التوزيع على الدائنين.
2- على الأمين إذا ظهر له ما يوجب تعديل قرار التوزيع أن يطلب من المحكمة الموافقة على تعديله, على أن يقدم ما يؤيد طلبه.
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 54 explained in plain English
After the bankruptcy estate's assets are sold comes distributing the proceeds to the creditors. This article of the Implementing Regulations of the Bankruptcy Law specifies what the distribution decision must contain:
- A statement of the assets sold from the bankruptcy estate's assets and the proceeds of their sale.
- The method of distributing the proceeds and the date of distribution.
- The names of the creditors and the amounts allocated to each based on their priorities, taking into account what will be deducted from the profits on future dues in case of early payment.
The last item means that a debt that is not yet due, if paid early on distribution, is subject to deduction of the corresponding profits on future dues. The article does not state how this deduction is calculated, nor the order of priorities itself.
Amending the decision: If the trustee finds something that requires amending the distribution decision, he must ask the court to approve the amendment and provide what supports his request. The trustee does not amend the decision himself.
This information helps the creditor to know what was sold of the assets, what share of the proceeds is its own and when it will receive it. The article follows Article 53 on workers' contracts, and precedes Article 55, which requires the trustee to return what remains of the proceeds after the creditors have received their rights.
If you believe the amount allocated to you does not match your priority, it is advisable to consult a lawyer who specializes in bankruptcy and commercial cases.
Practical example
The assets of a contracting company in Jeddah were sold in the liquidation procedure for SAR 5,000,000. The trustee issued the distribution decision containing the assets sold and their proceeds, the method and date of distribution, and the names of creditors and each one's share according to its priority, with a deduction of the profits of a bank whose debt was deferred and was paid early.
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 54 of the Saudi Implementing Regulations of the Bankruptcy Law
What does the decision to distribute to creditors in liquidation contain?
The assets sold and their proceeds, the method and date of distribution, and the names of the creditors and the amounts allocated to each according to their priorities.
Can the distribution decision be amended after it is issued?
Yes. If the trustee finds something that requires amending it, he asks the court for approval and provides what supports his request.
What happens to deferred debts on distribution?
Account is taken of what will be deducted from the profits on future dues in case of early payment.
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 requires that a creditor's payment request 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.