Moratorium As a Crucial Component of Corporate Restructuring Under Saudi Bankruptcy Law

Abstract

The moratorium or automatic stay is a fundamental component of corporate restructuring procedures. It provides the distressed company with a brief respite from its creditors by temporarily barring all collection efforts and all proceedings against the company and its assets. By temporarily barring such actions, the moratorium provides the company with time during which it can negotiate with its creditors and formulate a proper restructuring plan. The purpose of this article is to examine the efficacy of moratorium under the Saudi restructuring law in light of the UK and the US experiences. The article is principally concerned with two key issues: the scope of the moratorium and the circumstances under which relief from a moratorium may be granted.