Abstract
Purpose The purpose of the paper is to analyze the new Bankruptcy Law in Saudi Arabia (KSA Bankruptcy Law) under both a comparative lens and a policy-oriented one, while highlighting some of the most essential operational steps and procedures in a bankruptcy proceeding under the law. Design/methodology/approach The approach adopted analyzes the specific mechanics and procedures of a bankruptcy law under the general policies and goals of bankruptcy. Additionally, where appropriate, a brief comparison to the US Bankruptcy code and its provisions is presented to provide an alternative approach on how similar issues are handled under a reputable and proven bankruptcy system. Findings Overall, the KSA Bankruptcy Law is a major accomplishment and advancement to the Kingdom’s insolvency regime. The law consolidated and codified the laws governing bankruptcy under the Kingdom’s prior regime, and followed the structure of a modern bankruptcy regime. In doing so, several of the law’s policies and objectives have been fulfilled by providing an effective, predictable and reliable bankruptcy system. Originality/value Given the relatively recent adoption of the KSA Bankruptcy Law, the paper provides a comprehensive assessment of the law’s operation and its effectiveness in achieving its policy goals as a modern bankruptcy law.
Highlights
Bankruptcy Law) under both a comparative lens and a policy-oriented one, while highlighting some of the most essential operational steps and procedures in a bankruptcy proceeding under the law
The first part of this paper provides a discussion on the general policies of a modern bankruptcy system, which is used as the basis for analyzing the operational aspects of the KSA Bankruptcy Law and their underlying policies
The paper provided a survey of the KSA Bankruptcy Law, with a particular focus on specific features and provisions of the law that are most relevant to a bankruptcy practitioner representing debtors or creditors under any of the bankruptcy procedures available under the law
Summary
Bankruptcy Law) under both a comparative lens and a policy-oriented one, while highlighting some of the most essential operational steps and procedures in a bankruptcy proceeding under the law. Originality/value – Given the relatively recent adoption of the KSA Bankruptcy Law, the paper provides a comprehensive assessment of the law’s operation and its effectiveness in achieving its policy goals as a modern bankruptcy law. The first part of this paper provides a discussion on the general policies of a modern bankruptcy system, which is used as the basis for analyzing the operational aspects of the KSA Bankruptcy Law and their underlying policies. This is followed by an overview of the structure of the law, as well as a discussion of the express policy goals stated in the law. A well-designed bankruptcy system should incentivize debtors to seek early protection of the system to save their businesses before they become balance-sheet insolvent or before it becomes too late to restructure and continue a profitable business (International Monetary Fund, 1999, p. 18)
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