Bahrain's Reorganisation and Bankruptcy Law: Rescue Before Liquidation

Law No. 22 of 2018 gives distressed Bahraini companies a court-supervised route to restructure.

A modern insolvency regime

Law No. 22 of 2018 on Reorganisation and Bankruptcy replaced Bahrain's older bankruptcy rules with a regime that puts rescue first, drawing on international models.

Two main procedures

1. Reorganisation: a debtor in financial difficulty can apply to restructure its debts while continuing to operate, usually with management remaining in place under supervision.
2. Bankruptcy (liquidation): where rescue is not possible, assets are realised and distributed to creditors in the statutory order.

Key features

• An automatic moratorium protects the debtor from enforcement during the procedure.
• Creditors vote on the reorganisation plan in classes.
• A court-appointed trustee oversees the process.
• New (rescue) financing can receive priority.

Who can apply?

The debtor, and in many cases creditors, can apply to the court.

Why it matters for creditors

Early engagement matters: lodge claims on time and participate in the plan vote.

Ask LexArab

LexArab can explain the procedure that fits a distressed company and outline creditor steps. General information, not legal advice.