Insolvency Law at Mali
Mali's insolvency and bankruptcy framework is governed by the OHADA Uniform Act on Insolvency Law, which standardizes business law across 17 West and Central African countries, including Mali. This legal framework provides a structured approach to addressing financial distress, aiming to balance the interests of debtors and creditors while promoting economic stability. (The 10 best Bankruptcy Lawyers in Mali (2024))
⚖️ Legal Framework and Scope
Mali is a member of the Organization for the Harmonization of Business Law in Africa (OHADA), which adopted the Uniform Act on the Organization of Collective Procedures for Debt Settlement on September 10, 2015. This act outlines procedures for debt restructuring and liquidation, applicable to all member states, including Mali. The procedures are conducted before the commercial court, which may be seized by the company itself, a creditor, or the public prosecutor. (Project Finance 2024 - Mali | Global Practice Guides | Chambers and Partners)
🏛️ Insolvency Procedures
The OHADA Uniform Act provides for several procedures to address debtor distress:
Preventive Conciliation: Aimed at resolving financial difficulties before they lead to insolvency, allowing the debtor to negotiate with creditors to reach an amicable settlement.
Judicial Reorganization: Involves court-supervised efforts to restore a debtor's solvency, including the development of a reorganization plan.
Liquidation: If reorganization fails, the debtor's assets are liquidated to satisfy creditors.
These procedures are designed to be fair and transparent, with the involvement of insolvency administrators and oversight by the commercial court. (Understanding Liquidation and Insolvency Procedures in Mali)
📊 Priority of Claims in Liquidation
In the event of liquidation, creditors' claims are satisfied in a specific order:
Super-Prioritized Creditors: Including employees and the state (e.g., taxes, social security). (Project Finance 2024 - Mali | Global Practice Guides | Chambers and Partners)
Secured Creditors: Those with collateral backing their claims.
Unsecured Creditors: Including suppliers and service providers.
This hierarchy ensures a structured and equitable distribution of the debtor's assets.
🔄 Rehabilitation and Business Continuity
The OHADA Uniform Act emphasizes rehabilitation over liquidation, aiming to: (The 10 best Bankruptcy Lawyers in Mali (2024))
Restructure: Allow businesses to reorganize and continue operations. (Project Finance 2024 - Mali | Global Practice Guides | Chambers and Partners)
Protect: Safeguard employees' rights and maintain business relationships.
Supervise: Court-appointed insolvency administrators oversee the process to ensure fairness.
A reorganization plan must be developed within three months of initiating the procedure and can last up to five years.
🛡️ Legal Protections for Debtors
Upon the declaration of insolvency:
Asset Protection: Creditors are prohibited from seizing the debtor's assets.
Contract Continuity: Existing contracts, including employment and administrative agreements, remain in effect.
Management Control: Debtors may retain control over operations under supervision, with interest and penalties on debts suspended. (Project Finance 2024 - Mali | Global Practice Guides | Chambers and Partners)
📈 Impact on Business Environment
The introduction of the OHADA Uniform Act has been viewed positively, with stakeholders noting:
Enhanced Investment Climate: The law aligns Mali with international best practices, improving its ranking in ease of doing business.
Support for Troubled Companies: It provides a legal avenue for companies facing financial distress to restructure and continue operations.
Economic Stabilization: By facilitating business continuity, the law aims to mitigate the impact of economic downturns.
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