Kuwaiti banks oppose US-style insolvency law

Author: Lizzie Meager | Published: 14 Jul 2015

Kuwait’s plans for a new insolvency law, designed to help rehabilitate struggling businesses, have been opposed by local banks.

The idea is to bring its insolvency legislation more in line with Chapter 11 of the US Bankruptcy Code; the global restructuring benchmark which allows failing businesses to continue trading and restructure under court protection, rather than be liquidated.

It also provides additional tools for debtors, such as access to financing on favourable terms provided they give new lenders first priority on the business’s earnings.

"The banks are not happy with the entire draft, on the basis that it is a word-for-word imitation of Chapter 11," said Al Tamimi's Ayman Salem, who has...