New restructuring tools and processes in new Egyptian Insolvency Law

New restructuring tools and processes in new Egyptian Insolvency Law

Restructuring and insolvency analysis: we take a look at Egypt’s new restructuring tools and processes with Peter JM Declercq partner at DCQ Legal (www.dcqlegal.com).

Introduction

In 2018, Law No 11 of 2018 Promulgating the Law regulating the Restructuring, Preventive Composition and Bankruptcy (the ‘2018 Insolvency Law’) came in to force in Egypt. In the context of the 2018 Insolvency Law, a number of relevant decrees were also issued by the Minister of Justice of Egypt including Decree No 1899 of 2018 by which the procedures for the creation of a Bankruptcy Administration Expert Schedule were set. This Bankruptcy Administration Expert Schedule comprises three different schedules to enlist newly appointed (1) Restructuring Experts, (2) Bankruptcy Trustees, and (3) Appraisers or Valuers. In this article the focus will be on the role of the newly created group of Restructuring Experts at the Bankruptcy Department of the Economic Courts in Egypt, whose names were registered pursuant to Decree 2215 of 2019. From this Decree 2215 of 2019 it follows that 8 corporates are on the roster, two banks and 11 natural persons. In addition to the 2018 Insolvency Law, the role of Restructuring Experts is also further regulated in Decree No 6214 of 2018 and remuneration ranges for the different tasks and roles of the various newly appointed Experts are set forth in Decree 2208 of 2019.

Leaving aside Mediation (Initial Mediation is covered by Articles 4(a)—12 of the 2018 Insolvency Law, while Mediation in Bankruptcy Proceedings is addressed in Articles 178–188 and 202–204 of the 2018 Insolvency Law), which—strictly speaking—is not an independent insolvency proceeding in itself, but could be used as a restructuring tool nevertheless, the 2018 Insolvency Law contains the following three distinct proceedings:

  • the Restructuring Proceeding (Articles 15–29 of the 2018 Insolvency Law)
  • the Preventive Composition Proceeding (Articles 30–74 of the 2018 Insolvency Law) and
  • the Bankruptcy Proceeding (primarily covered by Articles 75–191, while Articles 192–209 of the 2018 Insolvency Law contain specific provisions for the ‘Bankruptcy of Companies’

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About the author:
Kathy specialises in restructuring and cross-border insolvency. She qualified as a solicitor in 1995 and has since worked for Weil Gotshal & Manges and Freshfields. Kathy has worked on some of the largest restructuring cases in the last decade, including Worldcom, Parmalat, Enron and Eurotunnel.