Dubai Court Declares Insolvency of a Manager Owed AED 7.3 Million⚖️
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In a ruling that reflects the flexibility of the judicial system in the United Arab Emirates, specifically in the Emirate of Dubai, the Civil Court issued a judgment declaring the insolvency of a manager (of Arab nationality) after proving his total inability to settle bank debts exceeding AED 7.3 million.
Details of the Legal Dispute The roots of the case trace back to the accumulation of massive financial obligations resulting from bank facilities secured by personal guarantees. Following the financial distress of the company managed by the debtor and its cessation of payments, banking institutions resorted to judicial claims. As a joint guarantor, the amount
s due multiplied due to interest and delay penalties, reaching a total value of AED 7,319,431.
The Pivotal Role of the Defense Team The case was successfully led by the team at Abdulla Al Mazroui Advocates & Legal Consultants, headed by Legal Consultant Dr. Alaa Nasr. The defense strategy relied on presenting a comprehensive and official financial audit, which did not merely rely on the debtor's statements but was based on expert reports and meticulous reviews of bank accounts from previous years.
Results of the Audit and Field Investigations Based on the procedures supervised by the firm in cooperation with the court-appointed trustee, the findings revealed the following:
Real Estate Records: No real estate properties registered in the debtor’s name were available for execution.
Movable Assets: No ownership of vehicles with high market value.
Bank Balances: Reviews proved that bank accounts did not contain sufficient liquidity to cover even a small fraction of the debt.
Trade Licenses: No active trade licenses with financial returns were found.
The Word of the Law: "The issuance of an insolvency decision is not merely a financial procedure; it is a legal lifeline aimed at reorganizing obligations in proportion to the debtor's realistic financial situation, while safeguarding creditors' rights under a timeline and strict judicial supervision."
Conclusion This ruling is a qualitative success for Abdulla Al Mazroui Law Firm. Dr. Alaa Nasr and his team were able to prove the client's difficult financial status with conclusive evidence, protecting him legally from direct enforcement actions and opening the door to a fair legal settlement.
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