In our October 2010 edition of Middle East Exchange, we looked at the general duties which directors and managers of UAE companies owe to their companies and their shareholders. In this edition, we consider the position where the company's financial position deteriorates. As directors or managers struggle with the inevitable commercial and operational pressures, what additional legal responsibilities and potential liabilities does UAE law place upon them?

In the wake of the high profile financial problems affecting the Dubai World group, the Dubai government has announced a new reorganisation law in case that group is unable to achieve an acceptable restructuring of its debts. New legislation was needed because the status of Dubai World as a company incorporated under special legislation means that the UAE insolvency laws do not apply to it. The new legislation:

In the wake of the high profile financial problems affecting the Dubai World group, the Dubai government has announced a new reorganisation law in case that group is unable to achieve an acceptable restructuring of its debts. New legislation was needed because the status of Dubai World as a company incorporated under special legislation means that the UAE insolvency laws do not apply to it. The new legislation: