Dubai Court declares manager insolvent over Dhs7.3 million debt

The Civil Court in Dubai declared an Arab manager insolvent after it was proved that he was unable to pay Dhs7,319,000 to two banking institutions.

This was due to joint guarantees he signed as the manager of a contracting company which faced financial difficulties and stopped fulfilling its obligations, resulting in the debt burden transferring to his personal liability and his inability to repay it.

According to the case file, during its operational period, the company obtained financing and credit facilities with personal guarantees from the manager. When the company stopped making payments due to its financial difficulties, the creditor banks began demanding the outstanding amounts from him as a joint guarantor. Over time, interest and late penalties accumulated, increasing the debt value to more than Dhs7 million.

The technical report showed that the debtor did not own executable assets, as it was found that he did not own any real estate registered in his name, nor vehicles with high market value, in addition to his bank accounts being devoid of sufficient balances to cover the debt.

The report also confirmed that the debtor had previously attempted to reschedule his financial obligations without reaching successful solutions, which led to the continued accumulation of interest and fees.

The report showed the debtor's full cooperation with the audit procedures and his submission of the required documents within the specified deadlines, with no evidence of any attempt to conceal funds or transfer assets with the intent to harm creditors.

The court clarified that declaring insolvency represents the most appropriate legal path to regulate the financial relationship between the debtor and creditors within a unified judicial framework that ensures a balance between rights and obligations.