Considerations for creditors

Although several analysts had predicted that the global credit crunch would sail past several of the Middle Eastern jurisdictions including Kuwait, the bite of the global recession became evident in the final quarter of 2008. As a result of the global recession, several corporate entities in Kuwait defaulted on their facilities and it became increasingly difficult for such entities to meet their financial obligations as they fell due and payable. In such circumstances, creditors justifiably became concerned and started to consider the various options available to them.

Secured or not? Are you a secured creditor? Resolving this question should be the first point of call given that secured creditors in Kuwait, as in many parts of the world, occupy a privileged position of priority with regards to the assets of an insolvent debtor. To a creditor who is obviously unsecured, the response to this question would be a no-brainer. However, resolving...