Abdullah Al Sahw_Khalifah Al Yaqout_Hamed Al Kandary

YFLG Sets Precedent with Bankruptcy Law Milestone 

In a pioneering move, Al-Yaqout & Al-Fouzan Legal Group (YFLG) has secured the first-ever approval from the Bankruptcy Authority for the restructuring request of a prominent insurance company in Kuwait, following the enactment of Law 71/2020.  

Led by Abdullah Al Sahw, Head of Insurance, alongside Khalifah Al Yaqout, Managing Partner, and Hamed Al Kandary, Senior Associate (all pictured above), the YFLG team devised a comprehensive restructuring strategy tailored to comply with the provisions of Law 71/2020. This strategy was meticulously reviewed by both the Bankruptcy Administration and the Bankruptcy Committee within the specified legal timelines outlined in the law. 

The successful collaboration between the Bankruptcy Administration and its committee in formulating an effective implementation framework for the new bankruptcy law, aligned with its objectives and economic vision, facilitated YFLG’s achievement. 

Law 71/2020 introduces innovative procedures aimed at prioritizing debtor protection and ensuring business continuity without compromising creditors’ rights. It introduces preventive settlement and judicial restructuring measures, empowering debtors to take proactive steps in the event of payment interruptions or impending insolvency. These modern legal standards contribute to fostering a conducive commercial environment, in line with Kuwait Vision 2035’s goal of positioning Kuwait as a global financial hub. 

Moreover, the law streamlines litigation processes by limiting appeals to two instances, making judgments from the Appeals Court final and unappealable. It establishes a specialized bankruptcy court, alongside the Bankruptcy Administration and the Bankruptcy Committee, to expedite proceedings by entrusting bankruptcy matters to specialized entities. 

Additionally, Law 71/2020 includes a dedicated section addressing bankruptcies of small and medium-sized enterprises, simplifying procedures compared to those governing larger entities under the original legislation. This move aligns with similar provisions in English and Italian laws, facilitating smoother bankruptcy proceedings for smaller businesses. 

YFLG’s groundbreaking achievement marks a significant milestone in Kuwait’s bankruptcy landscape, setting a precedent for future restructuring endeavors under the new legal framework.