All UAE business owners and managers should be aware of the very
recent decision of the Dubai Court of First Instance in the matter
of the Bankruptcy of Marka Holdings PJSC, which is indicative of
the risk that a company's Managers and Directors may face in
an underfunded bankruptcy under the provisions of the UAE
Bankruptcy Law.
In Marka, the Managers and Directors were found liable to
personally pay the amount of AED 448 million, representing the
entirety of the company's debt. Additionally, the Court
directed the transmittal of the matter to the Public Prosecutor for
their further handling of any criminal acts.
This decision demonstrates the impact of judicial application of
the Managers' and Directors' statutory personal
liability for an insolvent entity's debt, pursuant to
Bankruptcy Law Article 144, where the entity's assets are
insufficient to meet at least 20% of its liabilities. Furthermore,
in our view, the Court exercised its wide discretion in
