What steps to initiate UAE restructuring and obtain a moratorium on debts under insolvency law?

Companies in the UAE facing financial distress can pursue corporate restructuring under the UAE Federal Decree Law No. 9 of 2016 (Insolvency Law).

Key steps for initiating restructuring and obtaining a moratorium include:

- Assess Financial Eligibility: Review the company’s financial status, including assets, liabilities, cash flow, and ability to meet debt obligations.
- Prepare Required Documentation: Compile audited financial statements, creditor information, and any preliminary restructuring plans.
- Draft a Restructuring Plan: Outline practical measures such as debt rescheduling, operational improvements, and payment timelines.
- File Petition with the Court: Submit the restructuring plan and request a moratorium from the UAE insolvency court.
- Obtain Court-Approved Moratorium: The moratorium halts creditor enforcement, legal actions, and other debt recovery measures during the restructuring period.
- Notify Creditors and Negotiate: Inform all creditors and negotiate repayment schedules or debt compromises under court supervision.
- Implement the Restructuring Plan: Execute the approved measures, monitor progress, and report to the court as required.
- Court Confirmation: Upon successful implementation, the court confirms the plan, allowing the business to continue operations while ensuring compliance with legal obligations.

Engaging an experienced firm ensures that companies maximize their chances of approval, maintain compliance, and protect their assets during financial restructuring. Expert advisory helps streamline the process and provides the support needed to navigate complex insolvency proceedings in the UAE effectively.