Egypt’s House approves changes to Bankruptcy Act
House gives final nod to Bankruptcy Act amendments: Changes to the Bankruptcy Act that add further bankruptcy protections while giving creditors greater recourse options received a final vote of approval in the House of Representatives today, according to Youm7. The bill should be signed into law by President Abdel Fattah El Sisi and its executive regulations need to be published before taking effect.
What’s different? The amendments open a pathway for struggling companies and their creditors to discuss restructuring debt prior to formally filing for bankruptcy. The amendments also give indebted companies access to loans from certain authorized banks to help avoid bankruptcy. Under the amendments, creditors get a say on whether their debtors can continue operating, be placed into administration or liquidate their assets, among other things.
Background: Passed in 2018, the landmark act effectively decriminalized bankruptcy by abolishing prison sentences. It also allowed companies more time and options for restructuring by introducing mechanisms to help settle commercial disputes outside the courtroom and simplify bankruptcy proceedings.