Article 75 of the Saudi Bankruptcy Law
المادة 75 من نظام الإفلاس · الفصل الرابع: إجراء إعادة التنظيم المالي: مقترح إعادة التنظيم المالي
The article covers preparing the financial restructuring proposal, its content and the trustee's report on it, amending security with equivalent security by court approval, and filing it and setting the voting date.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يعد المدين المقترح -بمساعدة الأمين- خلال المدة التي تحددها المحكمة في حكمها بافتتاح إجراء إعادة التنظيم المالي.
2- يجب أن يتضمن المقترح نبذة عن الوضع المالي للمدين وتأثيرات الوضع الاقتصادي عليه وما تحدده اللائحة من معلومات ووثائق.
3- يعد الأمين تقريراً يتضمن رأيه في إمكانية الموافقة على المقترح من الدائنين وقابليته للتنفيذ.
4- دون إخلال بأحكام الفصل (الرابع عشر)، للأمين أن يتقدم إلى المحكمة بطلب الموافقة على تضمين المقترح بنداً بتعديل أي ضمان متى كان ذلك ضرورياً لتنفيذ المقترح، على أن يُضمّن في البند ذاته ما يفيد حصول الدائن المضمون المتأثر على ضمان مكافئ لضمانه الأصلي.
5- يبلغ الأمين الدائن المضمون بعزمه تقديم طلب إلى المحكمة وفق الفقرة (4) من هذه المادة، وللدائن المضمون أن يعترض أمام المحكمة على الطلب.
6- يودع الأمين نسخة من المقترح لدى المحكمة، وتحدد المحكمة موعداً للتصويت عليه، وللأمين أن يقترح على المحكمة الموعد الذي يراه مناسباً.
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 75 explained in plain English
This article governs the financial restructuring proposal that creditors vote on, from its preparation to the setting of the voting date:
- Who prepares it and when: The debtor prepares the proposal with the trustee's assistance, within the period the court sets in its judgment opening the procedure.
- Content: A summary of the debtor's financial position and the effects of the economic situation on it, plus the information and documents the Implementing Regulations specify.
- The trustee's report: The trustee prepares a report giving an opinion on whether the creditors can approve the proposal and whether it can be implemented.
- Amending security: Without prejudice to the provisions of Chapter Fourteen, the trustee may ask the court to approve including in the proposal a clause amending any security where necessary to implement it, provided the same clause states that the affected secured creditor receives security equivalent to its original security. The trustee notifies the secured creditor of its intention to file the request, and the creditor may object before the court.
- Filing and voting: The trustee files a copy of the proposal with the court, and the court sets a date for the vote on it; the trustee may suggest to the court the date it considers appropriate.
This connects to Article 74, which requires the debtor to classify creditors into classes where the nature of their debts or rights differs, and to Article 76, which limits the right to vote to a creditor whose rights the proposal affects and who has a claim included in the approved list of accepted claims, and to an owner whose rights the proposal affects.
A secured creditor who is notified of a request to amend its security would do well to consult a lawyer specializing in bankruptcy or in banking and finance.
Practical example
A hotel company in Makkah has had a financial restructuring procedure opened, and the court has set a period for preparing the proposal. With the trustee's assistance, the company prepares a proposal containing a summary of its financial position and the effect of the economic situation on it. The trustee concludes that implementing the proposal requires amending a mortgage held by a bank, so it notifies the bank of its intention, then asks the court to approve a clause giving the bank equivalent security. The bank may object before the court.
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 75 of the Saudi Bankruptcy Law
Who prepares the financial restructuring proposal?
The debtor prepares it with the trustee's assistance, within the period the court sets in its judgment opening the procedure.
Can the proposal amend a secured creditor's security?
The trustee may ask the court to approve including a clause amending security if that is necessary to implement the proposal, provided the affected creditor receives equivalent security. The creditor may object before the court.
Who sets the date of the vote on the proposal?
The court sets it after the trustee files a copy of the proposal with it, and the trustee may suggest the date it considers appropriate.
More articles on Financial Reorganization
- Article 41
After a protective settlement ends, the court, on its own initiative or at an interested party's request, opens the appropriate bankruptcy procedure if three conditions are met together.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب ذي مصلحة- بافتتاح إجراء الإفلاس المناسب إذا تحققت الشروط الآتية: أ- أن يكون المدين متعثراً أو مفلساً. ب- استيفاء شر
- Article 42
The article states who may request the opening of financial reorganization and its three cases, and bars the request if the debtor underwent this procedure in the previous 12 months.
1- دون الإخلال بأحكام الأنظمة ذات العلاقة، للمدين أو الدائن أو الجهة المختصة التقدم إلى المحكمة بطلب افتتاح إجراء إعادة التنظيم المالي للمدين في أي من الحالات ا
- Article 43
A request to open the financial reorganization procedure is filed with the court after submission, accompanied by the relevant information and documents as the Implementing Regulations specify.
يقيد طلب افتتاح إجراء إعادة التنظيم المالي لدى المحكمة بعد تقديمه مرافقاً له المعلومات والوثائق ذات العلاقة، وفقاً لما تحدده اللائحة.
- Article 44
If someone other than the debtor submits a financial reorganization request, the court notifies the debtor within 5 days, and the debtor may object at the hearing in three cases.
إذا تقدم غير المدين بطلب افتتاح إجراء إعادة التنظيم المالي، فعلى المحكمة تبليغ المدين به خلال مدة لا تزيد على (خمسة) أيام من تاريخ تقديمه، وللمدين الاعتراض على
- Article 45
The debtor, owner, manager, officer, board member and auditor are exempted from the Companies Law provisions on a company's losses reaching a specified percentage, as the Implementing Regulations specify.
يعفى المدين أو المالك أو المدير أو المسؤول أو عضو مجلس الإدارة أو مراجع الحسابات من تطبيق أحكام نظام الشركات فيما يخص بلوغ خسائر الشركة نسبة محددة في ذلك النظام
- Article 46Amended by M/89
Filing a financial reorganization request or opening the procedure stays claims for 180 days, extendable by up to 180 days, with cases for an early end.
1- يترتب على قيد طلب افتتاح إجراء إعادة التنظيم المالي أو افتتاحه، تعليق المطالبات لمدة (مائة وثمانين) يوماً، وللمحكمة من تلقاء نفسها، أو بناءً على طلب الأمين أ
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.