In a significant legal development, on December 24, 2023, the Kuwait Bankruptcy Management Court has granted approval for the initiation of preventive settlement procedures in favor of our client Mushrif Trading and Contracting Company K.S.C. This crucial step aims to address Mushrif’s financial challenges, involving a comprehensive settlement with various stakeholders including 7 local and regional banks, suppliers, sub-contractors, and employees. The total debt involved in these proceedings amounts to KWD 133,307,336.
The court’s ruling imposes a provisional suspension on all judicial claims and enforcement actions against Mushrif, providing a three-month window for the completion of the settlement plan and to secure creditors’ approval. This move provides critical breathing space for Mushrif to navigate through its financial troubles.
The Bankruptcy Law No. 71 of 2020 governs the processes of debt restructuring, preventive settlement, and bankruptcy. Preventive settlement procedures are a legal mechanism designed to aid companies that are experiencing financial strain but have not yet reached a state of insolvency. This process is facilitated by the court and allows the company to negotiate and restructure its debts and assets. By doing so, it offers an opportunity for the company to regain its financial stability while ensuring fair treatment of all creditors and stakeholders involved.