Article 164 of the Saudi Bankruptcy Law
المادة 164 من نظام الإفلاس · الفصل الثامن: إجراء التصفية لصغار المدينين: افتتاح الإجراء
The article requires the trustee to ask the court to end liquidation for small debtors as soon as it learns that proceeds from selling the estate's assets will not cover the procedure's expenses.
Official text (Arabic)
This article has not been amended since the law was issued.
يلتزم الأمين بتقديم طلب إلى المحكمة لإنهاء إجراء التصفية لصغار المدينين فور علمه بعدم كفاية حصيلة بيع أصول التفليسة للوفاء بمصروفات إجراء التصفية لصغار المدينين.
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 164 explained in plain English
This article places a direct duty on the trustee in the liquidation procedure for small debtors.
When does the duty arise? When the trustee learns that the proceeds of selling the bankruptcy estate's assets are not enough to meet the expenses of the liquidation procedure for small debtors.
What is required? To submit a request to the court to end the procedure, and to do so as soon as it learns of this, that is, without delay.
Why? Because the sufficiency of the assets for the expenses is one of the foundations of this procedure: Article 163 makes the sufficiency of assets for the liquidation expenses one of the conditions for opening it on a creditor's request, and makes their insufficiency a ground for rejecting the request. If it appears after opening that the proceeds will not be enough, continuing the procedure consumes what remains without benefit to the creditors.
The article does not state what procedure follows the ending in this case. It differs from the usual ending in Article 165, which occurs when the sale of assets is complete, the lawsuits have ended and the final distribution to creditors has been made within 12 months of opening.
A creditor following such a procedure may consult a lawyer specialized in bankruptcy and commercial matters.
Practical example
The liquidation of a small establishment in Jazan was opened, and the trustee then found that the equipment it had relied on was damaged and that the price from selling it would not cover the procedure's expenses. Here it must go to the court immediately with a request to end the procedure.
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 164 of the Saudi Bankruptcy Law
What does the trustee do if the assets are not enough for the liquidation expenses?
It must submit a request to the court to end the liquidation procedure for small debtors as soon as it learns of this.
Can the trustee delay the request to end?
No. The text requires it to submit the request as soon as it learns that the proceeds are not enough.
More articles on Small Debtor Bankruptcy Procedures
- Article 102
Opening the liquidation leads to the start of liquidating the bankruptcy estate assets, carried out by the trustee, except what the court approves an individual debtor keeping for the living of the debtor and dependents.
1- يترتب على افتتاح إجراء التصفية البدء في تصفية أصول التفليسة. 2- يتولى الأمين تصفية أصول التفليسة عدا ما وافقت المحكمة على احتفاظ المدين ذي الصفة الطبيعية به
- Article 127
The article states that the aim of the protective settlement for small debtors is to let a small debtor agree with its creditors on settling its debts through simple, low-cost procedures while it keeps managing its business.
يهدف إجراء التسوية الوقائية لصغار المدينين إلى تمكين المدين الصغير من التوصل إلى اتفاق مع دائنيه لتسوية ديونه خلال فترة معقولة عبر إجراءات يسيرة بتكلفة منخفضة و
- Article 128
The article lets a small debtor choose the ordinary protective settlement, and bars it from opening a small debtors' settlement if it was subject to it or to a protective settlement in the preceding 12 months.
1- للمدين الصغير طلب افتتاح إجراء التسوية الوقائية بدلاً من افتتاح إجراء التسوية الوقائية لصغار المدينين. 2- لا يجوز للمدين افتتاح إجراء التسوية الوقائية لصغار
- Article 129
The article allows a small debtor that is distressed, bankrupt or expecting distress to issue a decision opening the small debtors' protective settlement and file it with its proposal in the bankruptcy register.
1- للمدين الصغير إذا كان يتوقع مواجهة اضطرابات مالية يخشى معها تعثره أو كان متعثراً أو مفلساً، أن يصدر قراراً بافتتاح إجراء التسوية الوقائية لصغار المدينين وفق
- Article 130
The article requires a small debtor to call the owners to vote on the proposal if it affects their rights, at least 21 days before the voting date and before the creditors vote.
إذا تضمن المقترح ما يؤثر في حقوق الملاك، فعلى المدين الصغير دعوتهم إلى التصويت على المقترح قبل حلول موعد التصويت بـ(واحد وعشرين) يوماً على الأقل وفقاً لما تنص ع
- Article 131
The article lets a small debtor ask the court to suspend claims for no more than 90 days, and explains when that period ends.
1- للمدين الصغير أن يطلب من المحكمة -خلال المدة من افتتاح إجراء التسوية الوقائية لصغار المدينين إلى موافقة الدائنين على المقترح- تعليق المطالبات لمدة لا تزيد عل
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.