The law is aimed at circumventing litigation and prison sentences in bankruptcy cases, and assisting the restructuring of troubled companies.
The Egyptian cabinet has approved a bankruptcy draft law during its weekly meeting on Wednesday, reports Daily News Egypt. The law is aimed at reducing litigation and encouraging troubled companies to liquidate their business through efficient procedures.
The new draft law stipulates the establishment of bankruptcy management departments in economic courts and the formation of a committee of experts to catalyse the restructuring and settlement of troubled companies, according to Minister of Justice Hossam Abd El-Rahim. According to Abd El-Rahim, the new law will depend on the achievement of compatibility between creditors and debtors.
The draft law also works towards eliminating imprisonment as a penalty in bankruptcy cases, stipulating fines instead.
According to Minister of Investment Dalia Khorshid, the bankruptcy law is intended to complement the new investment law, with the aim of developing the legislative environment to stimulate economic activity and attract more investments, both local and foreign.