the modern ways to the regulations of bankruptcy law and its effect in encouraging investment
Bandar Althubyani
Law Department - Law and Judicial Studies - Islamic University of Madina
Abstract
Bankruptcy laws contribute in encouraging investment by making balance among the parties of investment relationship, debtors, creditor and national economic. In doing so, the bankruptcy laws adopted several means of bankruptcy procedures that aim to protect investors of bankruptcy and to create attracting investment environment for national and foreign investors. Among the procedures that distinguished modern bankruptcy laws is the financial reorganization procedure, which aims primarily to protect the investor from bankruptcy and regulate his/her financial situation, and to help him to restore stability to his/her financial situation, in order to ensure the continuation of their business and contribute to the growth of the national economy. The bankruptcy laws grant several legal opportunities to protect companies from bankruptcy at the time of filing the reorganization petition before the competent court such as suspending claims. This procedure helps many companies worldwide to restore financial balance such as General Motors and Chrysler. This paper will discuss the financial reorganization procedure in bankruptcy laws, the advantages that this procedure grants to debtors and creditors alike, and the extent of its contribution to protecting financially troubled companies from bankruptcy, improving the investment environment, and attracting investors in bankruptcy laws in the Kingdom of Saudi Arabia, the United Arab Emirates and Bahrain, and clarifying the possible opportunities to benefit from this procedure by legislators in other laws that have not adopted such procedure in its laws so far, and the problem under study will be discussed through the application of the comparative analytical methods with the Judicial precedents in jurisdictions such as the United States of America.
Keywords
"bankruptcy law", "reorganisation", "investment", "protection of investors", "right of creditors"
