Article 178 of the Saudi Bankruptcy Law

المادة 178 من نظام الإفلاس · الفصل التاسع: إجراء التصفية الإدارية: بيع الأصول

The article requires the Bankruptcy Committee to begin selling the estate's assets, if any, from the date administrative liquidation opens, unless it decides that the sale proceeds would not be worthwhile, in accordance with the Implementing Regulations.

Official text (Arabic)

This article has not been amended since the law was issued.

على لجنة الإفلاس البدء في بيع أصول التفليسة -إن وجدت- من تاريخ افتتاح إجراء التصفية الإدارية، ما لم تقرر أن حصيلة البيع غير مجدية، وذلك وفقاً لما تحدده اللائحة.

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 178 explained in plain English

This article specifies when the sale of assets begins in the administrative liquidation procedure.

The rule: the Bankruptcy Committee must begin selling the estate's assets, if any, from the date the procedure is opened. The committee does not wait for the submission of claims to be completed or any other stage before it begins.

The exception: if the committee decides that the sale proceeds would not be worthwhile, it is not required to sell. This makes sense in a procedure that is based on few assets to begin with, since the cost of sale may exceed the price.

The details: this is done as specified by the Implementing Regulations, and the text does not state the methods of sale or the criteria for judging that it is not worthwhile.

Relation to the surrounding articles:

Article 177 requires the committee to prepare a detailed inventory list of the estate's assets, if any.
Article 179 makes the completion of the sale of assets, if any, and the end of the lawsuits to which the debtor is a party, a condition for the committee issuing a decision to end the procedure within 12 months of its opening.

A person who believes that a particular asset deserves to be sold, or that its sale harms their rights, may consult a lawyer specialized in bankruptcy and commercial matters.

Practical example

In the administrative liquidation of a small services office in Hail, the only assets were old computers and used furniture. The Bankruptcy Committee began from the date of opening to sell the computers, while for the furniture it decided that the proceeds of selling it would not be worthwhile.

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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