Bankruptcy & Restructuring
Bankruptcy and restructuring: choose the path before the crisis chooses it
Advice on bankruptcy and restructuring procedures in Saudi Arabia for debtors and creditors, from preventive settlement and financial reorganisation to liquidation and claims.
Bankruptcy and restructuring: choose the path before the crisis chooses it
When liquidity falters or obligations pile up, time becomes a legal and a commercial element at once. The common mistake is to wait until the options of renegotiation or restructuring turn into multiple disputes and scattered proceedings.
For the company or debtor
We review the nature of the distress, the debts due and expected, the principal creditors, security, key contracts, disputes and cash flows, then compare a private renegotiation, a preventive settlement, financial reorganisation or the other paths.
For the creditor
We identify the basis and amount of the claim, the security and its ranking, any dispute over the debt and the debtor's position in the procedure, then pursue the claim and participate in the plan as the case requires.
Financial reorganisation
It needs a workable view on continuing the business, dealing with obligations and the company's relationship with creditors, so the legal work must be integrated with the financial statements and the business plan.
Preventive settlement
It may suit some cases where the company needs an organised framework to reach a settlement with creditors while management continues, according to the statutory conditions and the facts.
Liquidation
When continuing is not realistic, we focus on the parties' legal positions, claims, contracts, assets and security within the procedure under way.
Next step
In distress files, the earlier the review, the more options there are. You can start with a summary of the debts, the creditors, the security, the main contracts and the disputes under way.
Mistakes we see most often in this kind of matter
Waiting for the crisis to worsen. The later the advice, the narrower the legal and commercial options.
Paying selected creditors. Preferring one creditor over another without assessing the effect may expose the company or its management to liability.
Ignoring creditors' interests in the plan. A plan creditors will not accept will not be carried out, however tight it is on paper.
Confusing temporary distress with permanent insolvency. The right path differs between a company that needs time and one that needs an orderly liquidation.
How the work runs
- 01
Diagnosing the position. We read the financial and legal position: debts, security, contracts and cases.
- 02
Comparing the paths. Amicable negotiation, settlement, reorganisation or liquidation, and the effect of each.
- 03
Building the plan. We prepare the plan and documents in a form creditors will accept and that can be carried out.
- 04
Negotiation and representation. We negotiate with creditors and represent you before the competent authority where needed.
What we need to start
You do not need every document before you contact us, but having the following shortens the first assessment:
- A list of the debts, the creditors and their types
- The security provided
- Key contracts
- Pending cases and claims
- Recent financial statements
Frequently asked questions
When should I consider the statutory path?
When an inability to pay appears or is expected soon. The earlier the move, the wider the options.
Does reorganisation mean closing the company?
No. Its aim is usually to protect value and continue the business under a plan.
Should I negotiate with creditors on my own?
You can, but organised negotiation backed by a documented plan is stronger and carries less risk.
The information on this page is general and is not a legal opinion on a specific matter; the answer depends on the facts and on the law in force at the time.