The new bankruptcy law of oman shall come into effect on july 1st 2020, which was until now dealt by the commercial law and commercial companies law. The key three provisions dealt by this new law are related to bankruptcy, restructuring and preventive procedure.
A. Restructuring
Restructuring involves settling of the debtor's debts through restructuring plan. This is supervised through a restructuring committee that has experts that are empaneled by the competent department of the ministry of commerce & industry.
B. preventive composition
The trade debtor may apply for in situations when there is a disruption in the debtor's financial situation, which is likely to lead into an interruption of the payment of the debtor's debts. This method can be sought with the aim to achieve a settlement with creditors to avoid bankruptcy.
C. bankruptcy
A trader could stop paying his debts and present his petition on bankruptcy in case due to losses in his business he is not able to pay his debts timely. Such bankruptcy petition needs to be submitted within 15 days from date of payment stoppage and also include reasons for the same with documents to prove the point inclusive of statement of property and expenses.
The new regime aims at providing transparency to local and foreign investor in case of their debts not being realized or they not able to pay their debts timely. This regime shall also provide for rehabilitation of sick companies and other small and medium enterprises with respect bad debts and avenue for banks to reduce their non-performing assets.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.