Control of Saudi Corporate Reorganisations: Critical Analysis from an Anglo-American Perspective

Abstract The management of a company’s affairs during the restructuring process is critically important because the success of the reorganisation process depends heavily on whether such management is exercised properly. This article aims to closely examine the issue of control over the debtor company’s affairs during the reorganisation process under the Saudi Bankruptcy Law 2018 regime in light of the relevant UK and the US laws. The article will also refer, occasionally, to the laws of some European countries, such as Germany and France, when such a reference is necessary. The article is divided into two parts. The first part describes the two leading global models for corporate reorganisation, i.e. , the debtor-in-possession ( DIP ) model and the practitioner- in-possession ( PIP ) model. Following these descriptions, normative arguments promoting the two models and identifying their relative shortfalls are presented. The second part of this article discusses the two managerial models for corporate reorganisation procedures available under Saudi law: the DIP model adopted under the Preventative Settlement ( PS ) process and the co-determination model adopted under the Financial Reorganisation ( FR ) process. The advantages and drawbacks of both models are examined to determine their effectiveness and suitability for the Saudi legal environment.