Dubai merchant who owes Dhs13.6 million declared bankrupt

Dubai Civil Court of Appeal upheld the bankruptcy of a merchant and appointed an expert to liquidate his assets and settle his obligations to creditors.

The decision came after all previous attempts to resolve his financial situation had been exhausted and he had ceased to pay his debts.

The case dated back to May 2024, when a merchant (the debtor) filed a request to initiate bankruptcy proceedings, citing his deteriorating financial situation and failure to pay his debts for over 30 working days.

The debtor had previously filed an insolvency application with Dubai Courts, but the court rejected his request after reviewing the accounting expert’s report.

The debtor appealed the verdict, but the Court of Appeal upheld the decision issued by the Court of First Instance and rejected the appeal in form and content.

The case papers indicated that, in light of the merchant’s ongoing financial difficulties, he once again filed for bankruptcy.

The Court of First Instance reviewed the application and appointed an expert to assess his financial situation.

The court ordered the debtor to submit all documents relating to the companies he was associated with and the percentage of his shares in them. These companies were found to be affiliated with a food company.

The court decided to accept the request to initiate bankruptcy proceedings and the trustee began his task and prepared a final list of accepted debts including four creditors with total claims amounting to Dhs13.6 million.

While no grievances were filed against the list, some banks requested that the case be dismissed for not meeting the legal requirements stipulated in article 73 of the bankruptcy law.

The court, however, continued the proceedings and issued its ruling declaring the merchant’s bankrupt, with the trustee still appointed to carry out inventory and liquidation operations and distribute the proceeds to creditors.

Dr. Alaa Nasr, the merchant’s legal representative, said that the verdict includes exempting the debtor of the task of managing his funds and ordering him to hand over all documents and assets to the trustee within five days.

The court also ordered a seizure of all his balances and properties including bank accounts, real estate and vehicles on a precautionary basis, while assigning the competent authorities to disclose any property belonging to him.

In addition, the court obligated him to submit the financial statements and profits of the companies in which he owned shares.