Cab­i­net ap­proves bank­ruptcy law

Business monthly (Egypt) - - IN BRIEF -

With­out a spe­cific law gov­ern­ing bank­ruptcy, Egyp­tian in­di­vid­u­als and com­pa­nies fac­ing fi­nan­cial ruin have long had no choice other than to be eval­u­ated by the courts on a case-by-case ba­sis, of­ten fac­ing the specter of im­pris­on­ment for un­paid debts. In an at­tempt to re­move this hefty bar­rier to risk-tak­ing and in­vest­ment, Egypt’s Cab­i­net on Jan. 4 ap­proved a draft law that reg­u­lates bank­ruptcy, the coun­try’s first such leg­is­la­tion. Ac­cord­ing to a Cab­i­net state­ment, the law will “deal with cases of fal­ter­ing com­pa­nies and mer­chants to ful­fill their obli­ga­tions.” Fur­ther de­tails were not pub­lished, but the Cab­i­net said the law is “within in­ter­na­tional stan­dards” and “en­sures the rights of all par­ties” in­clud­ing cred­i­tors, debtors and em­ploy­ees. Be­fore be­ing en­acted the draft law must still pass through sev­eral stages, in­clud­ing win­ning par­lia­men­tary ap­proval.

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