UAE shields war-hit businesses from bankruptcy

The UAE has activated emergency bankruptcy protections for businesses whose financial distress can be directly linked to the Iran war, temporarily shielding them from creditor-led insolvency proceedings and giving them more time to restructure.

The measures apply to companies seeking court protection after Feb. 28, when hostilities escalated, and allow them to negotiate with lenders and suppliers without having to file for bankruptcy due to temporary payment difficulties.

Courts can also allow existing management to remain in control, permit companies to continue paying staff and approve new funding while restructuring talks are underway.

The rules are designed to prevent otherwise viable businesses from failing due to short-term cash-flow problems and to encourage creditors and debtors to reach restructuring agreements.