Once perceived as a relatively moribund restructuring market, where stressed and distressed borrowers and lenders ended up stuck in interminable refinancing cycles faced with court proceedings that, at least in perception, prioritized local creditor interests, today’s landscape could not be more different.

On 1 November 2021, the Federal Decree Law No. 35 of 2021 (the "Decree") (amending certain provisions of the Federal Decree Law No.9 of 2016 concerning Bankruptcy (the "UAE Bankruptcy Law")) came into force. The publication of the Decree follows a significant decision relating to directors' duties by the Dubai Court of First Instance in the matter involving the bankruptcy of Marka Holdings PJSC ("Marka") (the "Marka Case").

Overview

While the impact of the coronavirus disease (COVID-19) is as of yet uncertain, one thing is clear: the global outbreak of COVID-19 has caused − and will likely continue to cause − a precipitous decrease in demand and supply as a result of quarantine orders, business closures, and social distancing, all aimed at flattening the curve of the pandemic. As a result, a dramatic and pronounced economic downturn is predicted as the pandemic’s impact touches virtually all businesses, regardless of geography or industry.

In recent months, the US has seen a staggering increase in the number of retailers, both large and small, filing for bankruptcy. Among others, Dots, Alco Stores, Radio Shack, Deb Shops, Wet Seal, and Delia’s have each filed for bankruptcy protection in the past six months alone.