Insolvency Law at Morocco
Morocco's insolvency framework is primarily governed by the Moroccan Commercial Code, particularly Law No. 15-95 on judicial reorganization and liquidation. This law outlines procedures for both corporate restructuring and liquidation, aiming to balance creditor rights with the preservation of viable businesses. (CABINET TOUZANI - Publication)
🏛️ Key Insolvency Procedures in Morocco
1. Safeguard Procedure (Procédure de Sauvegarde)
Eligibility: Available to companies not yet in a state of cessation of payments but facing imminent financial difficulties.
Initiation: Only the debtor can commence this procedure.
Court Supervision: The court oversees the process, appointing a safeguard proceedings trustee to assist the company.
Objective: To allow the company to reorganize and continue its operations. (Morocco: Country File, Economic Risk Analysis | Coface, Commencing the Process | Morocco | Global Restructuring and Insolvency Guide | Baker McKenzie Resource Hub)
2. Judicial Receivership (Redressement Judiciaire)
Eligibility: Applicable to companies in a state of cessation of payments but whose financial situation is not irreparably compromised.
Initiation: Can be requested by the debtor, creditors, the public prosecutor, or the court ex officio.
Court Involvement: The court opens and supervises the process, appointing a receiver to manage the company's affairs.
Outcome: The procedure can result in the reorganization of the debtor’s business or its liquidation. (Morocco collection profile, Commencing the Process | Morocco | Global Restructuring and Insolvency Guide | Baker McKenzie Resource Hub, Morocco: Country File, Economic Risk Analysis | Coface)
3. Court-Ordered Liquidation (Liquidation Judiciaire)
Eligibility: For companies unable to continue operations due to insolvency.
Initiation: Can be commenced by the debtor, creditors, the public prosecutor, or the court ex officio.
Process: The court appoints a bankruptcy trustee to oversee the sale of the company's assets and distribution of proceeds among creditors.
Finalization: The procedure ends when the liquidation operations are completed. (Commencing the Process | Morocco | Global Restructuring and Insolvency Guide | Baker McKenzie Resource Hub, CABINET TOUZANI - Publication)
📊 Recent Trends and Statistics
In 2024, Morocco experienced a significant increase in business insolvencies, with over 40,000 businesses closing, according to the Moroccan Confederation of SMEs (CMTPME). This surge is attributed to factors such as the COVID-19 pandemic's economic impact, inflation, and challenges in accessing financing. (Morocco Recorded Over 40 Thousand Business Insolvencies in 2024 - Morocco World News)
⚖️ Legal Considerations
Director Liability: Directors may be held personally liable if they fail to act in the company's best interests or engage in fraudulent activities.
Clawback Provisions: Certain transactions made before the insolvency declaration may be annulled if deemed to disadvantage creditors.
Creditor Rights: Creditors must file claims within specified periods to participate in the distribution of assets.
🧭 Practical Insights
Early Intervention: Companies facing financial difficulties should consider initiating the safeguard procedure promptly to explore restructuring options.
Legal Assistance: Engaging legal professionals experienced in Moroccan insolvency law is crucial for navigating complex procedures.
Creditor Coordination: Creditors should be proactive in asserting their claims and participating in creditor assemblies to influence the outcome of proceedings. (Commencing the Process | Morocco | Global Restructuring and Insolvency Guide | Baker McKenzie Resource Hub)
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