Bankruptcy in Iraq
Bankruptcy is a court-supervised legal process initiated when a company or individual is no longer able to meet financial obligations. Under Iraqi law, bankruptcy leads to the liquidation of assets and structured distribution to creditors based on statutory priority. Bankruptcy is typically pursued when restructuring, settlement, or negotiated workouts are no longer viable.
Mechanisms
- Court declaration of bankruptcy
- Appointment of trustee or liquidator
- Asset inventory and valuation
- Liquidation and sale of assets
- Verification and ranking of creditor claims
- Priority distribution to secured and unsecured creditors
- Closure and dissolution of the entity
Reasons
- Persistent inability to pay debts as they fall due
- Accumulated liabilities exceeding asset value
- Final cessation of business operations
- Creditor petitions demanding liquidation
- Failed restructuring, settlements, or renegotiations
Impact on Creditors and Stakeholders
Bankruptcy procedures protect creditor interests by ensuring transparent liquidation, equitable distribution, and compliance with statutory priority rules. Secured creditors benefit from collateral rights, while unsecured creditors receive distributions according to available proceeds.
How Etihad Can Assist
Etihad provides legal and regulatory advisory services to banks, financial institutions, and businesses, supporting compliance with applicable laws, regulations, and regulatory guidance issued by any competent authorities.