In recent news, the Dubai Commercial Court of Appeal has upheld the bankruptcy declaration of a debtor who owed a staggering 337 million dirhams. The debtor, unable to settle his debts, had all his property seized and distributed to creditors following legal procedures outlined in the Bankruptcy Law.
The court documents revealed that the debtor had requested the opening of bankruptcy proceedings in April 2023 due to financial instability and an inability to pay debts for 30 working days. After evaluating the debtor’s financial situation, the court accepted the request and initiated bankruptcy procedures in November 2023.
The bankruptcy trustee then initiated legal procedures and listed three creditors, including banks within the state, with a total amount of 337 million dirhams. Two bank agents objected to the case, stating that necessary data and documents were incomplete. However, the court of first instance ruled to declare the debtor bankrupt, initiate sale and liquidation procedures, and restrict the debtor from managing his finances.
The decision was appealed by two banks who argued that incomplete information should not be accepted as evidence. The court considered their appeal but ultimately upheld its decision based on evidence presented, including an expert report on financial stability and ability to pay debts. It was found that due to financial instability and unwillingness to pay debts, it was necessary to declare bankruptcy.
