UAE Bankruptcy Law

During this period, the Law takes a debtor friendly approach. Debtors may initiate preventive settlement, restructuring or bankruptcy proceedings, and the Bankruptcy Court may admit such applications without the need to appoint a trustee, provided the debtor can demonstrate that its financial distress has arisen as a direct consequence of the Emergency Financial Crisis.
  
If a preventive settlement, restructuring, or bankruptcy proceeding is admitted, the framework provides a compressed restructuring window. The debtor may be granted up to 40 days to negotiate a deal with its creditors to repay its debts, with any resulting settlement requiring such debt to be repaid within 12 months. The Law also contemplates cram downs (subject to creditor objection rights), while creditor-initiated filings during the emergency period are postponed, giving distressed businesses critical breathing space.
 
Importantly, liquidity support is expressly contemplated. Debtors can obtain new financing, including on a priority basis and with the ability, in certain circumstances, to prime existing secured creditors.  

Taken together, Articles 251 to 257 represent a targeted crisis response toolkit, balancing creditor protection with the practical need to stabilise viable businesses during periods of Emergency Financial Crisis.