Article 189 of Bankruptcy Law

1 - The costs of selling the bankrupt’s assets subject to a preferential right or mortgage shall be paid in priority to the rights of the creditor holding the preferential right or mortgage over those assets. 2 - Subject to the provision of the preceding paragraph, the creditor holding a preferential right or mortgage shall have priority over other creditors in recovering his entitlements from the proceeds of the sale of the debtor’s property over which he holds a preferential right or mortgage. - The remainder of the debtor’s assets shall be distributed among his creditors. If the debtor’s assets are insufficient to discharge his debts, and without prejudice to the provision of items 1 and 2 of this Article, the debtor’s assets shall be distributed in the order specified in this item, and each creditor shall have priority in recovering his entitlements in full over the creditor following him: a - Maintenance prescribed for the wife, children and relatives. b - Any fees, charges or expenses incurred to provide goods and services for the debtor’s activity, or any debts that were necessary for the debtor’s business or benefited his assets, all of which arose after the issuance of the decision opening the proceedings. c - Charges, fees and costs arising from undertaking any proceedings under this Law. d - Any unpaid wages, salaries or gratuities of the debtor’s workers arising under labour laws, including the contributions that the debtor employer must Law Index 1432 Home Page Bankruptcy Law Law No. 71 of 2020 Promulgating the Bankruptcy Law pay for his workers to the Public Institution for Social Security. e - Amounts imposed for delay in paying the contributions due to the Public Institution for Social Security. f - The amount of duties prescribed on goods held at customs and due under the customs system. g - Debts due to ministries, public authorities and public institutions, or any debt due to the State’s Public Treasury. h - Debts arising from unsecured financing granted to the debtor after the opening of any of the proceedings specified in this Law, unless the terms of granting the financing provide otherwise. i - Debts due to ordinary creditors, creditors to whom the debtor’s debts are not secured by a mortgage or preferential right and creditors whose debts are secured by a mortgage or preferential right, to the extent of the unpaid portion of the debt after distribution of the proceeds of the sale of the property subject to a preferential right or mortgage. j - Subordinated debts, unless the documents creating these debts contain provisions to the contrary. k - Perpetual sukuk and bonds, unless the documents creating these debts contain provisions to the contrary. l - If anything remains thereafter, it shall belong to the shareholders or partners and shall be distributed among them in proportion to each one’s ownership. - The priority of creditors holding debts secured by a preferential right shall be determined according to the type and priority of the preferential right as specified in the law that created the preferential right. The ranking of a mortgage creditor shall likewise be determined by the rank of his mortgage. If the creditors have the same priority of preferential right or rank of mortgage, the debtor’s property subject to a preferential right or mortgage shall be divided among them pro rata. e - If the proceeds of the sale of the debtor’s property subject to a preferential right or mortgage are insufficient to satisfy in full the entitlements of the creditor holding the preferential right or mortgage, that creditor shall be treated as an ordinary creditor in respect of the remaining portion of his debt. Fifth Section Implementation of the Liquidation and Distribution Plan