Wael Al-Armouti, General Controller of Companies in Jordan, told Al-Araby Al-Jadeed that the troubled companies in his country have begun to turn to the insolvency law and benefit from it in an attempt to correct their situation and get out of the difficult conditions they are suffering from.

He added that 14 troubled companies so far have applied to benefit from the law to get out of their financial crisis as a result of the accumulation of debts and their inability to pay their obligations to others for reasons presented in the applications submitted by them, indicating that these companies operate in several sectors, especially commercial ones.

He pointed out that last week, a major commercial company also obtained approval from the competent judicial authorities to declare insolvency after its financial conditions faltered and its inability to overcome it under normal circumstances.

Al-Armouti said that the insolvency law provided an opportunity for troubled companies to rectify their situation away from resorting to liquidation or closure, which entails great burdens on shareholders, workers and all sectors, and causes damage to the national economy.

He indicated that insolvency is a positive step that enables troubled companies to overcome the financial conditions they face in order to ensure their continuity in work away from liquidation or closure, layoffs of thousands of workers and the loss of their rights, which leads to a high unemployment rate locally.
A report issued by the Department of Statistics in Jordan showed that the unemployment rate during the first quarter of 2023 reached 21.9%.

Last week, the conversion of a major company into insolvency raised concern in the Jordanian street about the future of the major companies, as they employ thousands of Jordanians and contribute to strengthening the food security system by providing basic food commodities and maintaining the margin of competition and price stability.
Al-Armouti said that the referral and approval of any company for insolvency takes place after checking all the data and data related to it and within clear determinants and steps that guarantee the rights of the company and the debt holders, and most importantly its continuity of work and not laying off its employees.

And he indicated that the insolvency law came to help troubled or about to default companies, rehabilitate them, and help them get out safely from the problems they face, in a way that guarantees the continuity of their business and with the follow-up of the insolvency agent.

The insolvency law, which was issued in 2018, is defined as the debtor’s cessation or inability to pay debts owed to him regularly, or when the liabilities incurred by him exceed his total funds. failure to which it is exposed.

Observers expressed their fear that some companies and their owners would take advantage of the insolvency law to escape from paying their debts within a legal framework.

The law allowed the insolvent debtor to reorganize his business through a clear plan approved by the creditors, and to work on defining the mechanisms, conditions and requirements for selecting insolvency agents and defining their tasks and duties.

The provisions of the law do not apply to banks, insurance companies, associations, clubs, and legal persons who are subject to the provisions of civil law, ministries, government departments, public official institutions, public institutions, and municipalities.

According to the insolvency law, as Al-Armouti said, it prohibits execution and seizure of the debtor and the continuation of the contracts being implemented such as work contracts, administrative contracts, licenses and concession rights, in addition to the possibility of retaining the authority to manage the facility and stop calculating interest, delay fines and many other privileges that allow the debtor to correct its situation and provide favorable conditions. So.

The New Arab