Law No. 23 of 2010 regarding Commercial Activity 

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Book Seven Bankruptcy and Reconciliation Preventive therefrom

Section One Reconciliation Preventive from Bankruptcy 

Chapter One Acceptance of Reconciliation 

Article 984 

Reconciliation Permissibility 

The person subject to bankruptcy declaration who finds himself unable to pay his debts may propose a preventive reconciliation to his creditors according to provisions of this Section. 

Article 985 

Conditions of Acceptance of Reconciliation 

Acceptance of the preventive reconciliation stipulates the following conditions: 

1. The reconciliation shall be effected prior to bankruptcy declaration. 
2. The debtor shall be enrolled in the commercial register for at least two years or from the date of commencement of his work if its duration is less than that. 
3. His accounts shall be regular for the period mentioned in the previous paragraph. 
4. His bankruptcy may not have been declared during the five years precedent to the reconciliation application and no preventer shall interfere in reconciliation within the same period. 
5. He may not have been judged by manipulated bankruptcy or in felony or misdemeanor on properties or breach of faith or public economy or trade or industry. 
6. To offer to his creditors one of the following two matters:

1. Submission of confirmed guarantees either in kind or personal under which he shall undertake to pay not less than (40%) forty percent of the value of his normal debts within six months from the reconciliation decision. If he proposed a long term he should submit the same guarantees for payment of legal interests on the amounts which he has undertaken to pay after the said six months. 
2. In case the debtor proposed reconciliation to his creditors on the basis that he shall assign to them all his existing properties at the time of proposal of reconciliation save what is to be excepted therefrom according to Article (1051), the value of the properties and assets should be sufficient for fulfillment of rights of his creditors at least to the percentage shown in item (A). 

Article 986 

Reconciliation Petition 

The debtor shall submit the proposal of the reconciliation through a petition to be signed by him and brought to the Court of the First Instance in the place where the office of his main activity is located showing the reasons led to his inability to pay the liabilities in his debt and which made him apply for the preventive reconciliation. The debtor should submit his commercial books, detailed list of his assets, statement of the value of each of them and list of the names of his creditors along with the petition. 

As regards the companies, the petition shall be submitted after approval and signature on it according to Article 1161. 

Article 987 

Objections of Acceptance of Petition 

The Court of the First instance, after hearing the statements of the Public Prosecution and the debtor statements when necessary, shall issue a decision of rejection of the proposal whenever the conditions provided for in the paragraphs from (1 ñ 5) of the Article (985) are not satisfied or if the Court is convinced that the proposed reconciliation is not corresponding to the conditions shown in paragraph (6) of the same Article. 

In such cases the Court shall declare the debtorís bankruptcy by itself.

Article 988 

Procedures of the Preventive Reconciliation 

If the Court accepted the proposal, it shall declare the opening of the preventive reconciliation action by a decision includes the following: 

1. Delegation of a judge to perform the reconciliation. 
2. Giving an order to convene the creditors meeting prior to expiry of (30) thirty days from the date of decision and appointment of the team of notification to creditors. 
3. Nomination of the judicial comptroller who shall be selected from the list of the judicial administrators with observance of provisions of Articles (1034, 1033, 1032). 
4. Appointment of a team not exceeding (8) eight days within which the reconciliation applicant shall deposit with Courtís Process Servers Office the amount which it deems appropriate to perform the formalities. 

In case of non-affection of the deposit the Court shall take the measures which are provided for in the second paragraph of the previous Article. 

Article 989 

Orders and Decision to be issued by the Delegated Judge 

The Judge orders shall be subject to contestation as per Article (1031). 

The decision to be issued by the Court of the First Instance on this contestation shall be final. 

Article 990 

Judicial Comptroller 

The judicial comptroller shall have the capacity of the public servant in the limits of the assignment entrusted to him. 

The provisions of Articles (1041, 1044, 4043, 1042) shall be applied in this respect.

Article 991 

Declaration of the Decision 

The Process Server Office of the Court hall declare the decision of acceptance of the reconciliation through posting it up on the Court signboard and shall bring it to the Commercial Register Office for registration, and provisions of the second paragraph of Article (1097) shall be applied. 

Chapter Two Effect of Acceptance of the Preventive Reconciliation 

Article 992 

Administration of Properties during the Reconciliation Process 

During the process of the reconciliation, the debtor shall remain administering his properties and running all his work without exception under supervision of the judicial comptroller and instructions of the delegated judge. 

The loans, adjustments, mutual consent, disposal and mortgage of the real estate or mortgage of a movable, warranties, assignment of disputes, acknowledgment of third parties rights, striking off real estate mortgages, 

return of the mortgaged objects, acceptance of conditional donation, heritage and all the operations which exceed the normal administration even if in the form of draft unless the delegated judge has approved all that in writing. 

Article 993 

Effects of Submission of Petition 

With effect from the date of submission of the petition until the decision of the sanction of the reconciliation enters into force, anyone who has a debt precedent to issuance of the decision, may not start enforcement on debtorís debt or continue the same, otherwise such action shall be subject to cancellation and the durations of the prescription and lapse shall suspend. 

The creditors may not acquire rights of privilege applicable to the united creditorsí rights unless allowed by the judge in cases provided for by the previous article.

Article 994 

Rules to be applied 

With observance of the date of submission of the petition, the provision of the Articles (1060, 1061, 1062, 1063, 1064, 1065, 1066, 1067, 1068) of this Law shall be applied to the preventive reconciliation. 

Chapter Three Direct Measures 

Article 995 

Endorsement on Commercial Books 

After issuance of the preventive reconciliation acceptance decision, the delegated judge shall endorse thereof under the last writing in the submitted books. The books and records shall be returned to the debtor who should put them at disposal of the delegated judge and the judicial comptroller. 

Article 996 

Convocation of Creditors Meeting 

The judicial comptroller should verify the correctness of the creditors and debtors list according to the commercial documents and books submitted according to article (986). He shall have the right to introduce the amendments he deems appropriate thereto. The comptroller should also notify the creditors with registered letters or telegrams or the legally approved means of communication of the date of the creditors meeting and debtorís proposal. 

If it is appeared that the serving of the notice provided for in the previous paragraph is difficult so that it could not be acted upon due to multiplicity of the creditors number or to difficulty in their identification, the Court may ask permission to act upon what is provided for by the Article (1135) after hearing the judicial comptroller. 

If there were loans securities holders the term provided for in item (2) of the Article 988) should be doubled. 

In all the cases, the session holding notice should be addressed to the joint representative of the loan securities holders, if any.

Article 997 

Acts and Report of the Comptroller 

The judicial comptroller shall take inventory of the debtorís assets, and prepare a detailed report showing therein the reasons of disturbance of the debtorís movement, behavior, reconciliation proposal and guarantees to be offered to the creditors and shall lodge them with Court Process Server Office within at least (3) three days prior to creditors meeting. 

The Judge may, upon request of the comptroller, nominate a person to assist him in estimation of the assets value. 

Article 998 

Declaration of Bankruptcy during Reconciliation Procedure 

If the judicial comptroller confirmed that the debtor has concealed a part of his properties or untruly showed them or did not declare debts by manipulation, or showed unavailable debts on him, or committed any fraudulent acts, he should notify the delegated judge thereof immediately. After performance of appropriate investigations he shall propose to the Court of the First Instance to declare the bankruptcy of that debtor. 

The bankruptcy shall be declared also if the debtor performed, during the reconciliation procedure, acts not entrusted to him by Article (992) or if he intended beyond his acts to prejudice the creditorís right in any aspects or if it is appeared at any time that he did not meet the conditions imposed for acceptance of the reconciliation. 

Chapter Four Decisions of Reconciliation 

Article 999 

Creditors Meeting 

The delegated judge shall preside over the creditors meeting. 

Each creditor may delegate another person by special power of attorney to be executed without certain formalities on the session convocation notice.

The debtor or his legitimate representative should present in person. He may not delegate another person by special power of attorney except for preventive, forcible reason to be decided by the delegated judge. 

The guarantors and warrantors may present with the debtor and those who are committed by the debts through recourse. 

Article 1000 

Decision on Reconciliation Proposal 

The judicial comptroller shall explain his decision and final proposals of the debtor in creditors meeting. Each creditor may explain the reasons which make him refuse acceptance of the proposed reconciliation, he may raise objection also to the combined debts in the reconciliation. 

The debtor may, in his turn, reply to or dispute the debts and should the sufficient explanations to the judge. 

Article 1001 

Acceptance of the Objected Debts Temporarily 

The delegated judge may accept temporarily the disputed debts wholly or partly for voting and getting the majorities only, provided that the same shall not breach the final consideration in respect of those debts. 

The creditors whose debts are not accepted may raise objection to that at the phase of endorsement of the reconciliation if their acceptance shall have impact on majority formation. 

Article 1002 

The Majority Required for Approval of the Reconciliation 

The preventive reconciliation must be approved by the majority who participated in the selection whenever such majority represents two third of the total debts accepted in the selection. 

The owners of the preferred debts shall not participate in the selection unless they assign their preference. The assignment may be restricted to a portion thereof, provided that it shall not be less than one third of their debts as to original and marginal. The effects of the assignment shall be ended if reconciliation is not reached or if it was cancelled or dissolved afterwards.

Provided that, participation in selection without authorization of partial assignment and acceptance of the reconciliation afterwards it shall definitely benefit the assignment of insuring the debt in full. It prevented also, fromselection and country of majorities, the debtor wife, relatives until the fourth degree and his brother in-law and those to whom the debts or these relatives are transferred since a period not less than one year from the date of application for reconciliation. 

Article 1003 

Approval of the Reconciliation Application 

The positive and opponent votes of the creditors shall be written down in the minutes of meeting of the creditors with indication of the name of each of them and the value of his debt. The minutes shall be signed by the delegated judge, comptroller and clerk. 

If it was difficult to complete the work on the fixed day, the judge shall postpone it to the coming session to be held within at most (8) eight days without need to notify the absent persons. 

The approvals of the creditors coming to him through the telegram or post or the legally approved means of communication shall be recorded on the margin of the minutes within (20) twenty days after completion of the minuteís preparation. If the majority of the creditors who are recommended in the meeting is approved the reconciliation without getting the majority of two third of the total debts, these approvals shall be counted in the majority of the debts. 

Chapter Five Reconciliation Certification 

Article 1004 

Non-Approval of the Reconciliation 

If the majorities provided for in Articles (1002, 1003) are not satisfied on established terms, the delegated judge shall notify the Court of the First Instance thereof, and it should confirm what is provided for in the second paragraph of the Article (987).

Article 1005 

Certification of Reconciliation after Approval 

If the majorities are satisfied, the delegated judge shall fix the session date and invites the concerned persons by an advertisement to published through posting up on Courtís signboard in a period not exceeding (30) thirty days from the date of posting up. 

The contradicting creditors and all the stakeholders who intend to raise objection to certification of the reconciliation shall declare their causative objection to the debtor and the judicial comptroller and shall interfere as litigants in the Lawsuit within at least (5) five days before the session. 

The judicial comptroller shall lodge during the same term with the Court Process Servers Office a causative report of his opinion. 

The debtor, even if not interfered as a litigant in the action, may present at the session to hear the judge statements. The Judge, as per exigencies of the case, shall have the right to perform the investigation which he deems appropriate and fix the session date before the Court within the next (10) ten days. 

Article 1006 

Provision of Reconciliation Certification 

The confirmation of satisfaction of conditions of acceptance of the reconciliation and the validity of the formalities, the Court shall evaluate the following matters: 

1. Whether the reconciliation is in conformity with creditorís economic interest as to assets, sufficiency of the debtor and his activity. 
2. Whether the majorities decided by the law are incorporated also in their evaluation, the creditors deprived form selection, who submitted an objection to their selection. 
3. Whether the offered guarantees are liable for fulfilling the reconciliation. In the case provided for in paragraph (6) of the Article (985), whether the offered funds are sufficient to pay the debts to the extent provided for in the same article.
4. Whether the debtor is worthy of the reconciliation in view of the reasons which led to his inability to fulfill his obligations with consideration of his behaviour. 

If these conditions are satisfied, the Court shall issue its judgment on certification of the reconciliation otherwise, it shall declare the debtorís bankruptcy. 

Regarding the disputed debts, the Court shall fix the amount of the sum which the debtor should deposit according to conditions of the reconciliation. Also, the modes which should be followed in payment of the due amounts on their maturity shall be defined in execution of the reconciliation or the same shall be referred to the delegated Judge to issue a decision in this respect. 

The two last paragraphs of the Article (1139) shall be applied. 

Article (1007) 

Reconciliation on the Basis of Transfer of Funds 

If the reconciliation is effected on the basis of transfer of the funds and did not provided for the contrary to the Court of First Instance shall nominate, in judgment of reconciliation certification, a liquidator or more, as well as a body composed of three or five creditors to assist in liquidation and the modes under which the liquidation to be effected shall be determined. 

Article 1008 

Appealing against or Refusing the Judgment on Reconciliation 

The opponents and the debtor may appeal against the judgment issued on certification of the reconciliation or its rejection within (15) fifteen days fromthe posting up. 

The appeal shall be declared to both the debtor and the judicial comptroller and the remaining persons involving in the lawsuit. 

The judgment shall be published according to Article (1022) and the date of appeal before the higher Court shall start from the date of posting up. 

Article 1009 

Effects of the Reconciliation on Creditors 

The judgment issued on certification of the reconciliation shall be binding to all the creditors who their debt attributable to prior to issuance of decision of opening the reconciliation procedures. Provided that it shall not prejudice their general rights against those who are committed to be liable jointly with debtor, his warrantors and those who are committed with him through recourse. 

Reconciliation in companies shall apply to the partners who have unlimited liability unless otherwise agreed upon. 

Chapter Six Implementation, Cancellation and Revocation of the Reconciliation 

Article 1010 

Reconciliation Implementation 

After reconciliation certification the judicial comptroller shall supervise over its implementation in the methods shown in the judgment. He should notify the Judge of anything prejudicial to the creditorsí rights. 

The second paragraph of Article (1146) shall apply. 

Article 1011 

Cancellation and Revocation of the Reconciliation 

The provisions of Articles (1146, 1147) shall apply to the preventive reconciliation, provided that the expression of receiver set out in the two Articles shall be replaced by the expression of judicial comptroller. 

The reconciliation shall not be cancelled if it is based on assigning the funds as per Article (985) or decrease of the value resulting from liquidation of asset from forty percent. The Court shall declare the bankruptcy in the same judgment under which the reconciliation shall be cancelled or revoked.

Section Two Bankruptcy 

Chapter One Opening of the Bankruptcy 

Article 1012 

Declaration of Bankruptcy 

Without prejudice to provisions of the previous section regarding the preventive reconciliation, the bankruptcy of the Merchant shall be declared either he is a natural or a body corporate. The Civil Companyís bankruptcy shall be declared also if any of them suspended payment of its debts. 

The case of suspension of payment of the debts shall be confirmed when the failure of the debtor to pay thereof is appeared or other external factors indicate his inability to perform his obligations in a regular manner. 

Article 1013 

Application for Declaration of Bankruptcy 

The bankruptcy shall be declared upon request of the debtor or one or more creditors or upon request of the public prosecution or the competent authority automatically. 

Article 1014 

Case of Suspension from Payment due to Criminal Act 

If the inability of payment of the debts is appeared from flight or scape of the Merchant or closing of his Commercial Shop or concealing or dissipation of his assets or reduction of his assets by fraud, the prosecuting attorney performing investigation against the Merchant shall ask the competent Court to declare his bankruptcy. 

Article 1015 

Case of Inability to Payment in Civil Lawsuits 

During consideration of a civil case, if it is appeared that the Merchant is unable to pay his debts and he is a party thereto, if the Judge is not competent to declare the bankruptcy he should refer it to the competent Court thereto.

Article 1016 

In Validity 

The Court of the First Instance shall be competent to declare the bankruptcy of the Merchant and Civil Companies which the main office of activity of each of them fall in its jurisdiction. The bankruptcy of the merchant whose main office of activity is abroad may be declared in Great Jamahiriya even if he declared his bankruptcy abroad with consideration of the international agreement exigencies. 

Article 1017 

Bankruptcy of the Merchant who suspended his Activity or Died 

The bankruptcy of the Merchant may be declared within one year from the date of his retirement from commence or death, if his suspension from payment is precedent to retirement or death. 

Article 1018 

Death of the Bankrupt 

If the bankrupt is died after the judgment on declaration of his bankruptcy, the formalities shall remain existing against his successors. The person who is nominated amongst the successors as an agent shall represent them. If it is difficult to reach at nomination of their representative within (15) fifteen days from the death of the bankrupt, he shall be nominated by the judge. 

Article 1019 

Duties of the Merchant who Applies for His Bankruptcy by Himself 

The Merchant who submit an application for issue of a judgment on declaration of his bankruptcy must lodge with the Courtís Process Servers Office his Commercial papers and books, profit and loss account, balance sheet of the two precedent years or from the date of establishment of his commence if its duration is less than that. 

He must lodge also a detailed and comprehensive statement of all the elements of his commence with indication of their estimated value and a list of the names of the persons who have rights in rem on the movables in his possession and their supporting documents.

Article 1020 

Hearing the Merchant Statements 

Prior to Declaration of the Bankruptcy the Court may issue an order for summoning the merchant for hearing his statement in a consulting room. The hearing may be in the presence of the creditors who apply for bankruptcy. 

Article 1021 

Judgment on Bankruptcy Declaration 

The judgment on bankruptcy declaration shall be issued in form of a consulting room. The judgment of the Court may include the following: 

1. Nomination of the delegate judge to take the formalities. 
2. Nomination of a receiver in bankruptcy. 
3. Ordering the bankrupt to lodge the balance sheet on his commercial papers and books within (24) hours, unless he has done so according to Article (1019). 
4. Appointment of a period not exceeding (30) thirty days from the date of issue of the judgment, within which the creditors and those who have rights in rem on movable properties in possession of the bankrupt, shall submit their applications to the Courtís Process Servers Office. 
5. Assignment of the place, day and hour in which the meeting shall be held for examination of the claims against the bankrupt, within (20) twenty days from the term provided for in the previous item and the judgment shall be temporarily executed. 

In the same judgment or based on a subsequent decision the Court shall issue an order for arresting the bankrupt or the other responsible against whom evidences provided for in Article (1014) are submitted or other ambiguities penalized by this Law. The judgment or the decision shall be communicated to the public prosecution for implementing thereof. 

Article 1032 

Communication and Publication of the Bankruptcy Declaration Judgment 

The judgment of bankruptcy declaration shall be declared through the methods established in the code of civil and commercial procedure, to each

debtor, receiver in bankruptcy and the creditor who requested thereof during a period not exceeding three days from its issue. 

During the same period the Court Process Servers Office shall post up a copy of the said judgment on the Court signboard and send a copy thereof to the public prosecution and to the Commercial Register Office so as to be entered At most on the day following its receiving. Also, a copy of the judgment shall be sent to the Process servers Office of the place where the bankrupt is born or established his bankrupt company. Regarding the antecedents register the provisions of the criminal procedure law shall be observed if necessary. 

The summary of the judgment shall be published as per legal methods in one of the daily newspapers to be assigned by the judge. 

Article 1023 

Objection to Bankruptcy Declaration 

The debtor and any of the concerned persons may raise objection to the judgment issued on the declaration of the bankruptcy within (15) fifteen days from the date of its entry in the Commercial Register. 

Anyone who applied for bankruptcy declaration may not raise objection to such judgment. 

The objection shall be through a summons to be notified to the receiver in bankruptcy and the creditor who requests so, provided that the objection shall not suspend execution of the judgment. 

Article 1024 

Judgment on Objection Lawsuit and its Effects 

The judgment on cancellation of the bankruptcy shall be notified to the receiver, the creditor who applied for bankruptcy and the bankrupt unless he is the opponent. The judgment should be published, notified, posted up and registered according to Article (1022) while the judgment of the objection rejection shall be notified to the opponent alone. 

In either case, the period of the appeal shall be (15) fifteen days from the date of judgment announcement. The provisions of the first and second paragraphs shall be applied to the judgment on appeal and shall be notified to the persons mentioned in them.

Article 1025 

Death of the Bankrupt during Objection Lawsuit 

In observation of the provisions established in code of civil and commercial procedure, if the bankrupt dies during the objection lawsuit, the formalities shall remain existing against the persons mentioned in the Article (1018). 

Article 1026 

Cancellation of the Bankruptcy Declaration Judgment 

In case of cancellation of the bankruptcy declaration judgment the consequences resulted in acts legally performed by the bankruptcy bodies shall be true. 

The Court shall estimate the expenses of the formalities, fees of the receiver in bankruptcy and shall determine the person who shall be under obligation to pay the same by an order not subject to complaint upon a report to be presented by the delegated judge. 

The formalities expenses and receiverís fees shall be borne by the creditor who applied for declaration of the bankruptcy and his error shall be shown and a judgment on compensation shall be issued against him. 

Article 1027 

Effects of Rejection of Bankruptcy Declaration Application 

If the Court rejected the bankruptcy declaration application, its decision should be causative. 

The creditor who applied for bankruptcy declaration may appeal against the rejection decision before the Court of appeal within (15) fifteen days from serving him notice of the rejection. The Court of Appeal shall issue its decision held in the form of consulting room after hearing the contestant creditor and the debtor. 

If the Court of Appeal accepted the appeal, it shall refer the papers to the Court of the First Instance with order of the bankruptcy declaration.

Chapter Two Bankruptcy Bodies 

Branch One Court of Bankruptcy 

Article 1028

Bankruptcy Court Authorities

The Court which has declared the bankruptcy shall be entrusted with all the bankruptcy formalities and to consider the disputes arising thereof unless it is within the competence of the delegated judge, it shall have the right also to consider the complaints against the delegated judge decisions. 

The Court of the First Instance held in the form of a consulting room at any time may hear the receiver, bankrupt and the creditorís board. It may also replace the delegated judge by nomination of another one. 

The Court decisions provided for in this article shall be final. 

Article 1029 

Powers of the Court of Bankruptcy 

The Court which has declared the bankruptcy shall be concerned with consideration of all the lawsuits arising out thereof whatever their value, with exception of the landed real estate lawsuits which are subject to rules of the normal powers. 

Branch Two The Delegated Judge 

Article 1030 

Authority of the Delegated Judge 

The delegated judge shall manage the bankruptcy operations and supervise the receiverís work progress; in addition to that he shall assume the following: 

1. Informs the Court of all the matters that call for taking special action.
2. Issues or makes the competent authorities issue the summary precautionary measures. 
3. Convokes the creditorís board to a meeting in cases provided for by the law and whenever he deems it appropriate. 
4. Authorities the receiver ñ unless authorizes by law ñ to nominate anyone who the department of the bankruptcy calls for seeking assistance of his work. 
5. Considers in an expeditious manner, the complaints to be brought to him against receiverís job. 
6. Permits the receiver in writing to litigate as claimant or defendant, nominate the lawyers and agents and to authorize the receiver to run the unusual management with respect of provision of Article (1040). The permission shall be for certain operations and for any litigation degree. 
7. Monitors the jobs of those who are delegation to work in the bankruptcy department and to relieve them from their tasks if necessary and to pay their remunerations after taking the receiverís opinion thereon. 
8. Examines preliminary the debts with collaboration of the receiver and to verify the rights in rem claimed for by the concerned persons and their respective documents. 

Article 1031 

Objection to the order of the Delegated Judge 

The complaint of the receiver or the bankrupt or the creditorís board should be brought to the Court or anyone who has interest in the order to be issued by the delegated judge within three days from the date of its issue, unless the law provides for otherwise. 

The Court of the First Instance shall consider the complaint by a decision to be issued by it in a form of consulting room in a particular session. 

Removal of the complaint shall not suspend the execution.

Branch Three Receiver in Bankruptcy 

Article 1032 

List of the Judicial Administrators 

A list of names of the judicial experts who the receiver in bankruptcy is been selected among them shall be prepared at each Court of the First Instance. However, the Court, for reasons to be shown in the judgment of the bankruptcy declaration, may select the receiver from the list of experts listed on a roll of another Court. 

Article 1033 

Qualifications Required in Nomination of the Receiver 

Nomination of the receiver in bankruptcy who was attached or disqualified or who has already been declared bankrupt or a criminally penalized judgment is issued against him resulting in preventing him from civil rights even temporarily shall be considered null and void. 

The wife of the bankrupt or one of his relatives till the fourth degree or his brothers in-law also may not be nominated as a receiver, as well as one of his creditors and anyone who provided professional service in favour of the bankrupt or participated in any forms in his activity during the (60) sixty days precedent to his bankruptcy declaration may not be nominated. 

Article 1034 

Acceptance of Assignment by the Receiver 

The receiver should notify the delegated judge of his acceptance of the nomination within one day from his knowledge thereof, otherwise the Court shall nominate a substitute receiver. 

Article 1035 

Capacity of the Public Servant 

The receiver in bankruptcy shall be considered as a public servant in the limits of what he performs in execution of his assignment.

Article 1036 

Receiverís Powers 

The receiver shall assume administration of the bankrupt properties under instructions of the delegated judge. 

He may not litigate without a written permission of the delegated judge except in the matters related to disputes on debts, delay in their declaration and the rights in rem in the bankrupt movables. 

He shall not have the capacity of a lawyer or a judicial attorney in fact in bankruptcy procedures. 

Article 1037 

Power of the Receiver is Untransferable 

The receiver in person shall assume the affairs of his position; he may not delegate any other person except in what is related to certain operations and after getting approval of the delegated judge. 

The judge may give him permission to seek help of other experts or persons including the bankrupt himself and shall pay them a fee. This shall not be effected unless after getting approval of the creditors board. 

Article 1038 

The Report to be presented to the Judge 

The receiver in bankruptcy should present, with one month from bankruptcy declaration, a detailed report to the delegated judge explaining therein the reasons of the bankruptcy, its condition and the care taken by the bankrupt to run his work, the level of his respective living, living of his family, his responsibility or responsibility of others and any other information assisting in performance of the criminal investigation. 

The receiver should indicate the bankrupt documents against which the creditors have appealed as well as the other papers against which he intends to appeal. 

The Judge may ask the receiver to submit a brief report prior to the said term.

But as regards the companies, the report must show all the information, and the documents confirming liability of the management responsible, monitoring bodies, external auditors, partners and others when necessary. 

The receiver should submit, during the first (7) seven days of each month, to the delegated judge a brief statement of his management and shall submit the special documents if requested to do so. 

Article 1039 

Deposit of the Amount to be passed to the Bankruptcy 

The receiver should deposit with one of the bank, during (5) five days, all the amounts which he shall collect according to the order to be issued by the delegated judge and in the methods which he shall decide after maintaining the amount which the judge deems necessary to face the litigation expenses and bankruptcy administration. 

A deposit account shall be opened in the name of bankruptcy administration. Withdrawal therefrom shall not be allowed except with authorization of the delegated judge. 

If the receiver did not make the deposit within the established period, the Court shall issue an order removing him. 

Article 1040 

Additional Powers of the Receiver 

The delegated judge may, after taking the creditors opinion, permit the receiver by a causative decision to reduce the debts, conclude a reconciliation and give receipts to creditors and assign the disputes, acknowledge the rights of the third parties, strike off the mortgages, return the mortgaged objects, relinquish the guarantee and accept the donation. 

If the value of the said disposals is not fixed or more than (LD 1,000) one thousand Libyan Dinars, the delegated judge shall issue a permission from the Court of the First Instance after taking the opinion of the creditors board. The Court shall issue the permission by a decision mentioning the justified reasons. 

The statement of the bankrupt shall be heard whenever possible.

Article 1041 

Complaint against Receiverís Acts 

The bankrupt anyone who has an interest may complain against the disposals of the receiver to the delegated judge who shall consider the same by a causative decision. 

The decision of the delegated judge may be contested also with the Court of the First Instance within three days from the date of its issuance. Consideration of such contestation shall by accusative decision after hearing the statements of the receiver and the contester. 

Article 1042 

Removal of the Receiver 

The Court of First Instance may, at any time whatsoever, remove the receiver upon proposal of the delegated judge or upon request of the Creditors Board or by itself. The Court of First Instance shall issue its decision after hearing the statement of the receiver and the public prosecution. 

Article 1043 

Responsibilities of the Receiver 

The receiver should observe the duties of his position diligently and carefully. He should also keep a register to be endorsed in advance by the delegated judge without expenses in which he shall record day by day the operations related to his administration. 

He shall bring a responsibility lawsuit against the removed receiver after permission of the delegated judge. The receiver whose assignment is expired even during the existence of the bankruptcy, should submit also statement of his administration as per provided for by the Article (1125). 

Article 1044 

Remunerations of the Receiver 

The remuneration and expense of the receiver ñ even if the bankruptcy is closed with reconciliation ñ shall be estimated by a decision, not subject to complaint, to be issued by the Court of First Instance upon request of the receiver and depending on report of the delegated judge and according to provisions of the system issued with expertís lists.

The remuneration shall be paid after approval of the receiverís report or after implementation of the reconciliation when necessary. The Court shall speed up an amount of the remuneration to the receiver as per the need. 

The receiver shall have no right to claim for any amount above what is estimated to him by the Court of the First Instance even if it concerns the expenses. 

Any amount to be paid or to be paid under a promise in violation of the previous prohibition shall be invalid and refundable in addition to the criminal responsibility if necessary. 

Branch Four Creditors Board 

Article 1045 

Nomination of the Board 

The Creditors Board should be formed within (10) ten days from the date of issue of the decision provided for in Article (1106), nevertheless, it may be formed temporarily prior to the said term if deems appropriate by the judge. 

The Board shall be formed by a decision of the delegated judge and shall be composed of three or five members to be selected from among the creditors and the judge shall nominate its chairman from among them. 

Article 1046 

Tasks of the Board 

Whenever the Court of the First Instance or the delegated judge deems fit, the opinion of the Creditorís Board may be taken in addition to the cases which shall be provided for by the Law. 

The Chairman shall convene the Board to the meeting whenever its opinion shall be necessary to be taken or when he deems it appropriate and its decisions shall be by majority of votes. 

The Board and any of its members may see the accounting entries and documents of the bankruptcy and requesting information and clarifications from the receiver and the bankrupt.

Chapter Three Effects of Bankruptcy 

Branch One Effects of Bankruptcy for the Bankrupt 

Article 1047 

Properties of the Bankrupt 

The Bankrupt shall be prevented from the date of judgment of declaration of his bankruptcy from administration and disposal of his properties. 

The properties which shall pass to the bankrupt during their existence after deduction of the debts resulting from possessing or maintaining the same properties, shall be incorporated into the bankruptcy elements. 

Article 1048 

Commencement of Bankrupt Lawsuits 

The receiver shall assume the litigation on disputes related to the financial rights of the bankrupt which were included in the bankruptcy even if the disputes are existing. 

The bankrupt may not intervene in the lawsuits except in the matters which shall result in accusing him of bankruptcy by manipulation or in cases where the law allows his interference. 

Article 1049 

Acts of the Bankrupt after Declaration of the Bankruptcy 

The dispositions and pleadings of the bankrupt, after declaration of his bankruptcy, towards the creditors shall be invalid. Also the amounts to be received by the bankrupt after judgment of declaration of his bankruptcy shall be considered null and void.

Article 1050 

Procedures after Declaration of the Bankruptcy 

The bankrupt procedures necessary for giving any of the dispositions the force of protest against the third parties if occurred after bankruptcy declaration shall not affect the creditorís rights.

Article 1051 

Properties not included in the Bankruptcy 

The bankruptcy shall not include the following: 

1. Properties and rights of pure personal nature. 
2. Support allocations, salaries, pensions, wages and what is gained by the bankrupt from his service in the limits of the necessary to support himself and performance of his family affairs. 
3. Right of legal disposal to revenue of his sonís properties and returns of the properties owned by the family with observation of the civil law provisions in this respect. 
4. Revenue of the properties forming the dwery and alike, without prejudice to the provisions related to personal status. 
5. Objects which may not be attached under the Law. 

The delegated judge shall assign, upon an order to be issued by him, the extent of the restrictions set out under paragraph (2). 

Article 1052 

Support of the Bankrupt and His Family 

In cases in which the bankrupt needs to be supplied by means of living to himself or his family, the delegated judge may after hearing the receiver and Creditors Board if constituted, estimate a support to the bankrupt and his family. 

The Bankrupt may not be prevented from continuity residence in his owned house in the limits sufficient for his residence and residence of his family until his assets are liquidated. 

Article 1053 

Correspondence of the Bankruptcy 

The correspondence having no personal nature to be addressed to the bankrupt shall be delivered to the receiver who has the right to maintain them inasmuch as related to the financial interests. The bankrupt shall have the right to see them. The receiver should keep the confidentiality of the correspondence contents as to affairs beyond the financial interests or affairs related to the bankruptcy.

Article 1054 

Imposition of Domicile on the Bankrupt 

The bankrupt may not be far from his domicile without permission of the delegated judge. He should present in person before such judge or receiver or the Creditors Board whenever he called for unless the judge allowed him to depute one person on his behalf when there is a legitimate excuse. 

The judge may issue an order to be brought compulsorily by the policemen if he did not comply with the attendance order. 

Article 1055 

General Register of Bankrupt 

In Process Serverís Office of each Court of First Instance a General Register shall be established in which the names of the persons whose bankruptcy is declared by the Court, as well as names of the persons whose bankruptcy is declared outside it if their place of birth falls within its area of jurisdiction. 

The names of the bankrupts shall be struck off the register upon a judgment by the Court of First Instance. 

Until such striking off is effected the bankrupt shall remain prevented from disposal of his properties as per provided for by the law. 

Branch Two Effects of the Bankruptcy on Creditors 

Article 1056 

Prohibition of the Individual Executive Acts 

Any Individual Executive Act shall not be performed or continued on the properties included in the bankruptcy unless provided for otherwise in the Law. 

Article 1057 

Creditorís Union 

The bankruptcy shall result in union of the creditors on the bankrupt properties.

All the rights required from the bankrupt shall be confirmed in the methods set out in the Chapter Five even if they were burdened with privilege unless otherwise stated by the Law. 

Article 1058 

Creditor possesses a Mortgage or Privilege on Movables 

The preferred debts or guaranteed by a mortgage debts or guaranteed by a mortgage shall be paid as per the order of their degrees according to provisions of the civil law during the bankruptcy after their entry into the debts lists. 

The Creditors shall submit an application to the delegated judge to allow him to sell and the judge shall appoint by a decision to be issued after hearing the receiverís and the Creditorís Board statements the time and the mode in which the sale shall be effected either by negotiation or public auction with indication of the methods which should be followed. 

The delegated judge may, after hearing the Creditorís Board if constituted, authorize the receiver to recover the mortgaged objects or burdened by the right of privilege after payment of what is deserved by the creditor or sell those objects in the mode shown in the previous paragraph. 

Article 1059 

Rights of Creditors who have Privilege in Distribution of Assets 

The creditors who have debts guaranteed by mortgage or mortgage on a movable or privilege of right of priority over the price of the guaranteeing properties to receive their debts as to original, interests and expenses. 

If they did not receive thereof in full they shall unify as to the remaining rights with normal creditors in distribution of the remaining assets. They shall have the right also to unify in the distributions made prior to distribution of price of the objects on which they have guarantee. 

In this case, if they have been able to receive their rights in full as to capital, interests, expenses regarding the returns of the sales price, the amount which they have received in the previous distributions and shall be allocated to the normal creditors. If they did not be able to receive their rights except partly, then they shall have no right to stick to what is remaining to them as to the origin of the debt except at the percentage to be finally allocated to the normal creditors.

Article 1060 

Effect of the Bankruptcy on Monetary Debts 

The declaration of the Bankruptcy shall suspend the validity of the conventional and legal interests to the creditors union until the bankruptcy is closed, unless the debts are guaranteed by mortgage or mortgage on a movable or privilege. 

For the purposes of the creditors union the monetary debts of the bankrupt shall be mature with effect from the date of bankruptcy declaration. 

The debts entered with condition shall be incorporated into the union under Articles, (1104, 1122). The debts which the bankrupt may not be claimed for unless after deprivation of a principal debtor shall be considered among the conditional debts. 

Article 1061 

Clearance in Bankruptcy Phase 

The Clearance shall be fall among the debts claimed for the creditors from the bankrupt and among his property as to debts in their debt even if they are not matured prior to declaration of the bankruptcy. 

However, the clearance shall not be effected in respect of the debts which are not matured if gain by the creditor through a contract between living persons after declaration of the bankruptcy or within the year preceding thereof. 

Article 1062 

Debts Free from Interests 

The unfruitful debts which are not matured on declaration of the bankruptcy shall be incorporated in their totality among the bankrupt debts. Nevertheless, the compound legal interests shall be deducted in each individual distribution at (5%) price annually for the period from the date of the payment order and the day of maturity of that debt. 

Article 1063 

Loan Securities 

The loan securities to be issued by the Joint-Stock Companies shall be estimated at their nominal value after striking out what is recovered from its value.

The securities which shall be depreciated through voting on at a price more than their nominal value shall be estimated at an amount equal to the capital which shall result from restoration of the remaining securities which are not included in the voting on to their current value on the basis of the compound interest at (5%) price. 

The value of each security shall be equal to the result of dividing the capital into the number of the undepreciated securities. 

In any case the securities may not be estimated by less than their nominal value after deduction of what is paid thereof on the basis of the depreciation. 

Article 1064 

Non Monetary Rights

The unmatured debts which shall be monetarily estimated on the basis of other values or which their subject matter shall be monetary obligation to be estimated in the bankruptcy as per their value on the date of the bankruptcy declaration. 

Article 1065 

Permanent Income and Life-Long Salary 

If the bankruptcy is indebted to a permanent income, it shall be estimated as per provided for in the Civil Law and the person who deserves life-long salary shall enter among the creditors union by an amount equal to the value of the salary capital at the time of bankruptcy declaration. 

Article 1166 

Bankruptcy of One of the Joint Debtors 

The creditor of a number of joint debtors shall enter in the bankruptcy of one of them who declared his bankruptcy with all his rights of the capital and marginal until he receivers his right in full. 

The joint bankrupts may not recourse between each other unless after the creditors receives his right in full.

Article 1067 

The Creditor of a Number of Joint Debtors who Receives His Right Partly 

If the creditor received, prior to bankruptcy declaration, from one of his debtors joint with bankrupt or from his warrantor a portion of his debt, he shall have the right to enter into the bankruptcy at the amount of what is remained to him. 

The debtor who is joined with the bankrupt who has the right of recourse to him shall have the right to enter in the bankruptcy at the amount which he has paid. Nevertheless, the creditor shall have the right to claim for the share of the joint debtor in the distribution until he received what is remaining to him, without prejudice to his right to recourse to the joint debtor if he did not 

receive his right in full. 

Article 1068 

Debtor or Bailsman of the Bankrupt who Possess the Right of Guarantee 

The bailsman of the bankrupt or the one who is committed with him of those who have mortgage on bankruptís properties to ensure their right of recourse in proportion to the amount guaranteed by mortgage. 

The returns of the sale off the mortgaged real estate or the mortgaged objects shall be allocated to the creditor and shall be deducted from the amount which he deserves. 

Branch Three Effects of the Bankruptcy on Acts harmful to Creditors 

Article 1069 

Disposals Free of Charge 

The disposals free of charge which are effected by the bankrupt within two years prior to declaration of the bankruptcy with exception of the normal gifts and disposals to be effected in fulfillment of a moral duty or for the purpose of achieving a public interest as long as they are appropriate to the donators economic position shall be null and void in respect of creditors.

Article 1070 

Settlements 

Payment of the debts which become payable on or after the day of the bankruptcy declaration or if the bankrupt has paid such debts within the two years precedent to the bankruptcy declaration shall be null and void in respect of the creditors. 

Article 1071 

Normal Cancellation Measures 

The receiver may ask for declaration of cancellation of the disposals which have been effected by the debtor to harm the creditors according to the rules of the Civil Law. 

The lawsuits shall be brought before the bankruptcy Court of First Instance either against the director contractor or against his successor in cases which are to be permissible to bring such lawsuits. 

Article 1072 

Compensated Acts, Pleadings and Guarantees 

The following disposals shall not be enforced against the creditors unless the second party confirmed that he has no knowledge of inability of the debtor to pay his debts: 

1. Compensated disposals which shall be effected by thee bankrupt or the obligations which he shall undertake during the two years precedent to the bankruptcy declaration which are not absolutely appropriate to what he has taken or promised. 
2. Payment of the monetary debts which become mature and payable in payment is made in other than the money or in other than the other normal means if the same is occurred during the two years precedent to declaration of the bankruptcy. 
3. Mortgage of the movable and the voting real estate mortgages which shall arise out during the two years precedent to the bankruptcy declaration in ensuring prior debt not falling due. 
4. Mortgage of the movable and real estate mortgages either optional or judicial which shall arise out during the year preceding the declaration of the bankruptcy in ensuring a mature debt.

The payment of the matured and payable debts shall not be enforced also against the creditors, as well as the compensated disposals and the disposals creating the right of preference in ensuring a debt created at the same time if these disposals are effected during the year preceding the declaration of the bankruptcy and the receiver confirmed that the second party was in knowledge of inability of the debtor to pay his debts. 

The provisions of this article shall not be applied to institutions of the movable and real estate mortgage in the limits of these transactions with observance of provisions of the special laws. 

Article 1073 

Payment of a Bill of Exchange after Falling Mature 

With exception of provision of the second paragraph of the previous article payment of a bill of exchange shall be true if it is incumbent upon its bearer to pay in avoidance of loss of his right to recourse lawsuit. 

In this case, the last debtor obliged through the recourse must recover the amount received by the receiver, if this latter confirmed that the debtor was in knowledge of the inability of the principal debtor when he withdrew or revolved the bill of exchange. 

Article 1074 

Transactions between the Couple 

The transactions provided for in Article 1072) shall be cancelled if effected between the couple during the period in which the bankrupt was practicing a commercial activity and the husband failed to furnish the proof for the fact that he has no knowledge of the inability of the wife of the bankrupt. 

Article 1075 

Rights of the Bankrupt Wife 

If the husband is gone bankrupt the wife shall recover the real estates and movables in kind which she shall prove that they were owned by her prior to marriage as well as the properties which were passed to her without compensation during the marriage period. 

The bankrupt wife may recover the real estates which she has purchased during the period of her marriage with money passed to her in a precedent manner, provided that the purchase contract shall provide expressly for statement of the money use and the wife shall indicate their source.

Article 1076 

Legal Factual Evidence for Gaining the Wifeís Properties 

With exception of the case provided for in the second paragraph of the precedent article, the properties which have been gained by the wife with compensation during the five years preceding the bankruptcy declaration shall be considered as purchased with bankrupt husbandís money, and should be included in the bankruptcy assets, except if the wife submitted a proof to the contrary. 

Article 1077 

Payment of the Wife of Her Bankrupt Husband Debts 

If the wife paid debts to the credit of her bankrupt husband there shall be legal evidence that she has fulfilled these debts with her husband property unless an evidence is submitted to the contrary. 

Article 1078 

Guarantee the Wifeís Rights 

If the husband was a merchant at the time of marriage or was then without other certain profession, then became a merchant during the same year, the real estates which he has owned at the time of marriage or passed to him through heritage or donation or legacy shall be alone a guarantor to the rights of the wifeís debts. 

Article 1079 

Restrictions 

The woman whose husband was a merchant at the time of the marriage contracting, or was at that time without other certain profession, then became a merchant during the year following the marriage contract, shall have no right to bring any lawsuit on the bankruptcy for the sake of the benefits provided for in the marriage contract. 

In this case, the creditors shall have no right to pretense on their part by the benefits granted by the wife to her husband in the said contract. 

The donations granted between the couple during the marriage period shall be also null and void.

Article 1080 

Effects of Cancellation 

Anyone who returned what he has received due to the previous provisions may enter among the creditors of the bankrupt to the extent of the debt which he has. 

Branch Four Effects of the Bankruptcy on Previous Legal Relations 

Article 1081 

Sale not Completed by both Contracting Parties 

If the sale contract is not executed or incompletely executed at the time of declaration of the purchaseís bankrupt, the seller shall have the right to fulfill his obligations or stick to his right in the price within the debts required fromthe bankrupt. 

If the seller shoed his unwillingness to stick to such right the contract execution shall depend on acceptance of the receiver to subrogate the bankrupt in the contract with abidance by al the consequences or he shall disengage therefrom by a permission of the delegated judge. 

The seller may, after warning the receiver, request the delegated judge to appoint a term not exceeding eight days after which the contract shall be considered cancelled. 

In case of bankruptcy of the seller, the contract shall not be cancelled if the sold thing entered into purchaserís ownership, otherwise the receiver shall have the right to vote between execution or cancellation of the contract. In case of contract cancellation, the purchaser shall have the right to claim for his debt among the bankrupt debts and he shall have no right to claim for compensation for the damages. 

Article 1082 

Term Sale or Sale by Installments 

If the purchaser has gone bankrupt and the price payment is postponed or by installment, the receiver may subrogate the bankrupt in the contract with permission of the delegated judge. However, the seller may request a guarantee unless the receiver proceeds to pay the price immediately after deduction of the legal interest. 

In sale by installments with maintaining the right of the ownership, the bankruptcy of the seller shall not be a reason for contract. 

Article 1083 

Supply Contracts 

In sale with delivery on lots and in supply contracts, the provisions of the second, third and fourth paragraphs of the Article (1081) shall apply. 

Nevertheless, the receiver who subrogated the bankrupt in contract should pay also in full the price of the lots which he received. 

Article 1084 

Return of the Unpaid Objects 

If the movable sold object has been sent to the purchaser prior to declaration of the bankruptcy, but it did not become at this disposal at the destination and no thirty party has acquired right thereon, the seller may recover it possession, bear the expenses and shall return the amounts which he received in advance unless he has desire to execute the contract and involves in the bankruptcy through the price, or unless the receiver refuses to take delivery of the sold object after payment of his price in full. 

Article 1085 

Term Contract on Paper 

Money market or commodities market the term contract on paper money market or term commodities market shall be cancelled if it became payable after declaration of bankruptcy of one of the contracting parties with effect from the date of the bankruptcy. 

If the bankrupt becomes a creditor as a result of the cancellation, the difference between the contract price and value of the objects or the bonds on the date of bankruptcy declaration shall be considered as one of the bankruptcy elements and shall be incorporated in the claims if the case is contrary thereto.

Article 1086 

Partnership 

The particular partnership shall be dissolved by bankruptcy of the principal partner. The co-partner shall have the right to enter among the bankrupt creditors for the remaining portion of his share which is not depreciated by his portion in the losses. 

The co-partner shall be under obligation to pay the remaining of his share inasmuch as to be sufficient to cover his portion in the losses. 

The measures provided for in Article (1160) shall be applied in its respect. 

Article 1087 

Current Account and Proxy on Commission 

The current accounts and the proxy on commission shall be dissolved by the bankruptcy of either party 

Article 1088 

Incomplete Possession of Objects by the Bankrupt 

If the objects which the bankruptcy should return are beyond his possession on the day of declaration of the bankruptcy and becomes difficult to the receiver to recover them. The concerned persons may enter their right among the bankrupt debts regarding the value of that object on the date of declaration of the bankruptcy. 

If the possession of the object is removed after putting the seals the concerned persons may claim for payment of the object value in full, wit observance of the provisions regarding the relation between commission agent and the Mandator. 

Article 1089 

Lease of Real Properties 

The bankruptcy of the lessor shall not result in cancellation of the lease of the real estate unless there is an agreement to the contrary and the receiver shall subrogate the lessor in the contract. 

In bankruptcy of the lessee the receiver may disengage from the contract at any time provided that he shall give the lessor a suitable compensation to be estimated by the delegated judge on disagreement of the both parties after hearing the statements of whomsoever it may concern. The right of compensation is preferred according to provision of the Civil law. 

Article 1090 

Piecework Contract 

The piecework contract shall be dissolved by declaration of bankruptcy of either party, unless the receiver declares, after taking opinion of the Creditors Board if formed and upon permission of the delegated judge, his desire to subrogate the bankrupt in the contract with submission of sufficient guarantees and he should notify the second party thereof within (20) twenty days from the bankruptcy declaration. 

However, the contracting may not continue if the contractors has gone bankrupt and he was considered as an essential element in the piecework contract with observance of the provisions regarding public works contracts. 

Article 1091 

Insurance Contract 

Bankruptcy of the insured against risks shall not cancel the insurance contract. If the risk is aggravated due to the cancellation unless there is an agreement to the contrary. 

If the contract remains existing, the up-paid insurance premiums should be paid in full even if they were fell due prior to the bankruptcy declaration. 

Article 1092 

Publication Contract 

The printed matters law shall govern the effects of the publisher bankruptcy on publication contracts.

Chapter Four Maintenance and Administration of the Bankruptcy Elements 

Article 1093 

Stamping 

Immediately after declaration of the bankrupt the delegated judge shall stamp the properties of the bankrupt existing in his main office and his other properties according to provisions established in the Civil and Commercial code of procedures. If it is difficult for him he shall delegate the judge of the Summary Justice by special power of attorney. The presence of the receiver is must when putting stamps on the main office of the bankrupt unless his presence is difficult for legitimate reason. 

As regards the amounts available at other authorities, the competent judges of the Summary Justice shall put the stamps upon authorization of the delegated judge. 

The minutes to be prepared by the judge of summary justice shall be promptly referred to the delegated judge. 

Article 1094 

Putting of Seals by the Judge of Summary Justice 

The Judge of the Summary Justice may, when having ascertained knowledge of the bankruptcy declaration, put the seals on the bankruptís shops locating within the area of his jurisdiction even before receiving the authorization provided for in the second paragraph of the previous Article. 

Article 1095 

Objects Excluded from Sealing 

In addition to what is excluded by the Civil and Commercial Code of Procedure from putting the seals. The sealing may not include the following: 

1. Everything to be used in running all the work without exception if the judge sees not to suspend the work immediately. 
2. Commercial books and the remaining papers.
3. Bills of exchange and other bond which fall due or near to fall due and which should be delivered to the receiver to fulfill them. 
4. The money which should be delivered to the receiver to deposit thereof as per provisions of Article (1039). All these things shall be mentioned in detail in the minutes. 

The commercial books and documents should be lodged, after endorsing by the judge who performs the action, with Court of First Instance Process Servers Office. However, the delegated judge may order the receiver to keep them temporarily with an undertaking to submit them whenever required to do so. 

Article 1096 

Breaking the Seals and taking Inventory 

The receiver should require the permission of the judge at the earliest possible time to break the seals and take inventory. He should do so according to the provisions shown in the Civil and Commercial Code of Procedure in the presence of or notify the bankrupt and Creditors Board if any, and with assistance of the Clerk of the Court of the First Instance or the Court of the Summary Justice who executes the minutes. The Creditors also may be present. 

The delegated judge shall have the right to issue an order to follow certain rules and to take special precaution for taking inventory and when necessary a person shall be assigned to estimate the valuables. 

Prior to completion of the inventory, the receiver shall invite the bankrupt merchant or managers of the bankrupt companies to decide whether they have knowledge of existence of other valuables to be added to the inventory warning them of the penalties to be imposed on any one who abstains from mentioning the particulars or gives false data. 

The inventory minutes shall be prepared in two original copies to be signed by all the presents and one copy shall be lodged with Court of the First Instance Process Servers Office. 

Article 1097 

Receiving the Bankruptís Properties 

The bankrupt properties shall be in the possession of the receiver once he wrote down each of them in the inventory minutes as well as in other commercial books and documents.

If the bankrupt possess immovable properties and other properties subject to general registration, the receiver shall notify the concerned departments by a copy to be extracted from the bankruptcy declaration judgment to enter themin the general records. 

Article 1098 

List of Creditors and Holders of Rights in Rem on Movables and Balance Sheet 

The receiver should prepare a list of creditors name to be extracted from the commercial documents and book and the other information which he may obtain, with indication of the debts of each them and the rights of preferences. He should prepare also a list of the name of all the holders of the rights in rem on movables properties in the possession of the bankrupt and indication of their supporting documents. These lists shall be lodged at the Clerical Office of the Court. 

The receiver should prepare also the balance sheet of the latest financial cycle if the bankrupt did not submit the same in the established time, and to introduce the amendments and additions which he deems appropriate to the balance sheets and statements submitted by the bankrupt according to Article (1019). 

Article 1099 

Temporary Administration 

After issuance of the bankruptcy declaration judgment the Court may issue an order for continuation of the bankruptís commercial activity temporarily, if he deems that the sudden suspension of the work may result in a gross damage that may be out of repair. 

After issuance of the decision which is provided for under Article (1106), the Creditorís Board should decide what it deems appropriate in respect of continuation of the bankruptís activity partly or wholly or resuming it with indication of the conditions. The Court may not issue an order for continuation or recommencement unless the Creditors Board has decided thereof. 

If it is decided to recommence the work temporarily according to the previous paragraph, the delegated judge shall convene the Creditors Board meeting every two months so as to be informed by the receiver of the condition of the work progress and to decide what it deems appropriate in respect of continuation or not. The Court of First Instance may issue an order to

suspend the work temporarily if requested by the Creditors Board or at any time which it deems appropriate. 

In all these cases, the Court shall issue a resolution in the form of a consulting room after hearing the receiverís statement. 

Article 1100 

Expenses to be Presented by the Treasury 

The Treasury shall spend on legal declaration of the bankruptcy works with effect from the date of issuance of the bankruptcy declaration judgment until the bankruptcy declaration closing, if there is no money among the properties to meet the judicial fees. 

Regarding the stamp duty, registration fees and other expenses, shall be entered as a debt on the bankrupt according to an order to be issued by the delegated judge. 

The expenses to be paid by the treasury for bankruptcy declaration formalities shall be recorded in a particular register to be kept by the clerical office which shall be recovered once the ready money is made available. 

Chapter Five Confirmation of the Debts and Rights in Rem to the Third Parties on Movable Properties 

Article 1101 

Notification of Creditors for Investigation 

The receiver shall notify, by registered letters and other legally approved means of communication, the creditors and the concerned persons included in the statements provided for in Article (1098) of the limited date within which they should submit their applications to the clerical office with reasons of the bankruptcy declaration judgment on the method of preparation of the debts statement. 

Concerning the creditors and the other concerned persons residing outside Great Jamahiriya, the notification shall be to their representative, if he is not available, the judge may extend the limited date and notify all the creditors and the other concerned persons thereof.

Article 1102 

Application for Inclusion in the Creditors Statement 

The application for inclusion in the bankruptís debts statement should include the name and surname of the creditor, indication of the required amount and the bond out of which the debt has been arisen, reasons of the preference and documents supporting all of that. 

If the domicile of the creditor is outside the area of the Court jurisdiction, the legal address should be defined in the application at that jurisdiction; otherwise what is intended to be notified to him shall be served at the Clerical Office of the Court. 

The document which are not submitted with the application should be presented before the meeting to be held for verifying the correctness of the debts. 

The judge may, upon a requested to be submitted by the concerned persons, order the Clerical Office to take a copy of the (bond to the order) or (to the bearer) and return the original to its applicant after recording on it to the effect that he has submitted an application for inclusion in the debts statement. 

Article 1103 

Effect of the Application 

The submission of the petition for inclusion in the debts statement shall result in the same effects consequent upon the judicial notice and suspension of the validity of the limited times prescribing the rights in respect of the measures which shall be difficult to perform during bankruptcy declaration. 

Article 1104 

Statement of the Required Debts 

The Court Clerk shall prepare a list of the applications to be submitted as per their order of coming for inclusion within the bankruptís debts statement, and shall submit it to the delegated judge for examination with assistant of the receiver, after hearing the bankruptís statement and obtaining the necessary information for preparing the debts statement on basis thereof showing therein what he deems appropriate for acceptance and the preference or the mortgage to be attached thereto, as well as the debts which he deems appropriate not to accept them partly or wholly with brief indication of the reasons which motivate him to that. The debts shown in the last paragraph of the Article (1060) as well as the other debts for which the supporting documents are not submitted shall enter among the debts statement with reservation. 

But if the debt is with unenforceable judgment and intended not been entered, it shall be necessary to appeal against it. 

The statement of the debts prepared by the judge shall be lodged with Clerical Office within at least three days from the day fixed in the Article (1021), item (5) and the creditors shall have the right to see them. 

Article 1105 

Confirmation of Correctness of the Debts Statement 

The debts statement to be prepared by the judge shall be examined in the meeting to be provided for by the Article (1021), paragraph (5) in the presence at the receiver and the bankrupt. The applications arrived afterward or submitted in the same meeting shall be considered also. 

The judge shall introduce whatever change or amendment he deems necessary to this list after assessment of objections and remarks to be initiated by the concerned persons and after seeing the presented documents. 

If it is difficult to do so in one meeting, the judge shall postpone the consideration to another term within eight days without need for new invitation either to the presents or the absents. 

In all the cases, the judge may issue the final statement of the debts during the fifteen days next to the creditors meeting. 

Article 1106 

Enforcement of the Debts Statement 

The statement of the debts shall be signed by the judge and the Clerk. The statement shall be closed by a resolution of the judge stipulating that it is enforceable with effect from the date of the last creditors meeting or from the date provided for in the fourth paragraph of the previous Article. The debts statement shall be lodged along with the judge's resolution with Process Servers Office. The creditors shall have the right to see the same. 

If there are application for inclusion of debts in the statement not wholly accepted or partly accepted or accepted with reservation, then the receiver shall notify the refused creditors or those who are included with reservation immediately with registered letters accompanied with acknowledgment receipt or other legally approved means of notification. 

Article 1107 

Objection of the Refused Creditor or included with Reservation 

The creditors who are prevented from inclusion of their debts in the statement or accepted therein with reservation may complain, within (15) fifteen days from the lodgment of the debts statement with Process Servers Office, to the delegated judge who should appoint the session date and notify for attendance all the complainants and the receiver to whom the notice should arrive at a certain time to be fixed by the judge. 

Article 1108 

Objection Formalities and Judgment 

The delegated judge shall examine the various complaints, and then fixes a day for consideration thereof before the Court. If the complaints are found appropriate for judgment and others need long investigation, the judge shall issue an order for separation of the complaints appropriate for judgment and refer them to the Court for consideration. 

The Court shall consider all the complaints to be brought to her by one judgment. It may decide to include, temporarily the disputed debt, wholly or partly, in the statement. 

The judgment must be posted up on the Courtís signboard within (8) eight days from the publication and shall be temporarily executed. The Clerk shall immediately notify the concerned persons of the judgment publication. 

The limited time for appealing is (15) fifteen days from the date of the judgment posting up and the dates of the appeal by cassation shall be reduced to a hall. 

Appealing against the disputes which shall not exceed the powers of the judge of the Summary Justice shall not be accepted. 

Article 1109 

Objection to the Debts Accepted in the Statement 

Each creditor shall have the right to raise objection to the debts included in the statement within (15) fifteen days from the date of their lodgment with the Clerical office, by bringing an appeal before the delegated judge. The judge shall fix a session for consideration of the appeal and notify the litigant parties and the receiver to attend. The notice should reach the receiver and the creditors whose debts are appealed at a time to be assigned by the judge. The lawsuit shall be entered according to provision of the second paragraph of the Article (1107). 

If the parties did not reach an agreement during the progress of the lawsuit, the judge shall issue a decision not subject to appeal to keep the installments of the disputed debts a part on distribution of the bankruptcy assets. 

Regarding the investigation and consideration on the appeals, the provisions of the previous article shall be applied with consideration of all the appeals and complaints in one session. 

Article 1110 

Delay in Declaration of the Debts 

The creditors may request the delegated judge to include their rights in the debts statement even after issuance of the judgment provided for in the Article (1106) until completion of distribution of all the bankruptcy assets. 

The judge shall appoint a session for consideration of the application for attendance thereto a notice shall be served to the applicant and the receiver to whom the notice should arrive at a certain time to be fixed by the judge. 

The lawsuit shall be entered according to provisions of the Article (1107). The other creditors may enter into the lawsuit. 

If the receiver did not raise an objection to acceptance of the delay debt, and the judge deemed that it depends on a ground, he shall decide its acceptance, otherwise he shall proceed with debt realization procedures according to provisions of the Civil and Commercial Code Procedures. 

The delayed creditor shall bear the expenses, unless it is proved that he has nothing to do with the delay reasons. 

Article 1111 

Application for Cancellation of Debts Included in the Statement 

If it is appeared before closing the bankruptcy that the acceptance of a debt or a privilege was occurred by falsification or deception or essential error in the facts or decisive documents are found which nobody knew of its existence before, then the receiver or any of the creditors may submit a petition for cancellation of the delegated judge resolution or judgment of the Court of First Instance in respect of the that debt or privilege. The petition shall be submitted through an appeal to be brought to the delegated judge who shall appoint a session for pleading. The parties thereto and the receiver shall be notified to attend. The notice should reach them at a certain time to be fixed by the judge. 

Until final consideration of the dispute the judge may pass an order on performance of the distribution to keep the installments due to the creditors whose debts are appealed against. 

If the bankruptcy declaration is closed without consideration of the appeal, the lawsuit shall remain existing before the Court. 

Article 1112 

Petitions for Recovery of the Movables and Separation from each other 

The provisions of the Articles from (1101) to (1111) shall be applied in respect of applications for recovery of the movables in possession of the bankrupt and their separation from each other. 

If the applicant delayed in submission of his application according to what is set out in Article (1110) the judge may suspend the sale of the objects required to be recovered or returned or separated from each other with submission of a guarantee if he deems that appropriate. 

In all the cases, the judge must hear the bankruptís prior to issuance of the decision in respect of those applications. 

The applications shall not prejudice what is distributed as to price of the objects required to be recovered or returned or separated from each other. However, they may be stuck on the amounts which are not distributed.

Chapter Six Liquidation of Assets 

Branch One General Provisions 

Article 1113 

Commencement of Liquidation 

The receiver should commence the sale of the properties after issuance of the decision provided for in Article (1106) under supervision of the delegated judge, after hearing the Creditors Board, if it has been formed and with observance of exigencies of the temporary management if it has already been approved. 

The delegated judge may authorize the receiver, by a decision which he shall issue after hearing the Creditors Board if it has been formed, to effect the sale even prior to the term provided for in the referred Article. 

Article 1114 

Provisions which should be Applied 

The provisions of the Civil and Commercial Code Procedure regarding enforcement shall apply to the sale of the movable or immovable properties of the bankrupt unless contradicting the following provisions. 

Branch Two Sale of Movables 

Article 1115 

Modes of Sale of Movable Properties 

The delegated judge shall assign a term for sale of the movable properties as well as the natural fruits of the movable property after hearing the receiver and the Creditors Board, he shall assign also the mode of the sale by negotiation or public auction and the measures to be followed.

He may also issue an authorization for sale of the movable properties, wholly or partly in one lot after deciding the arrangements to be taken in respect of the publication if required by the necessity or the interest. 

Branch Three Sale of the Properties 

Article 1116 

The Lawsuit brought for Dis-appropriation 

If a creditor has already dis-appropriated a property or more prior to bankruptcy declaration, he shall subrogate the creditor in the procedure. 

If the receiver delayed without reasons in exercising this right, the creditor who performs the procedure or the bankrupt and anyone who has interest herein, may complain with the delegated judge according to Article (1041). If the procedures of distribution of the price are existing the receiver shall interfere for completion of such procedures. 

The receiver should keep a particular account of the sales of properties and the revenue to be resulted therefrom with effect from the date of the bankruptcy declaration. The amount to be collected from the revenue with the price of his properties shall be distributed. 

Article 1117 

Modes of Sale of a Property 

The sale of properties should be effected by bidding. 

However, the delegated judge may issue an order for sale of the properties in other mode than the bidding if the receiver proposes so after taking the Creditors Board opinion and approval of the creditors included in the statement who have the right of preference over those properties, whenever he is convinced that the sale in such a mode is feasible and useful for declaration of the bankruptcy. 

The sale may be effected under a decision to be issued by the delegated judge upon receiverís request.

The judge who performs the sale measures may suspend the sale when he believers that the offered price is much less than the fair price. 

The receiver shall send the summary of the decision issued by the judge in this regard to any creditor included in debts statement and having preference on the property as well as to the registered mortgagee creditors. 

Article 1118 

Procedures of Distribution of the Collected Amount 

The delegated judge shall distribute the amount to be resulted from the sale according to the provisions of the Chapter Two, when necessary the delegated judge, upon an order to be issued by him, shall fix what is to be paid to the receiver on account of the final remuneration to be estimated according to the Article (1044). 

This amount shall be deducted from the price with procedures fees and expenses of the administration. 

Chapter Seven Distribution of Assets 

Article 1119 

Commencement of Distribution 

The receiver should submit every two months statement of the available amounts with a report proposing the modes of their distribution with effect from the date of issuance of the decision provided for in Article (1106), unless the delegated judge assigns another term, provided that the amounts necessary for the procedures should be kept. 

The delegated judge shall introduce whatever modifications he deems appropriate to such statement after taking the Creditors Board opinion. He shall issue an order for lodgment of the same with Clerical Office, and all the creditors shall be notified thereof. 

The creditors may submit their remarks within (10) ten days after expiry of which the delegated judge shall see the remarks of the distribution list and gives it the force of the enforceable bond.

Article 1120 

Arrangement of Amounts Distribution 

The amounts to be collected from liquidation of assets shall be distributed in the following order: 

1. For payment of expenses including those provided by the public treasury and the debts arising out of the bankruptcy administration and of continuation in a bankruptís activity if authorized. The delegated judge shall estimate the amounts provided for in this paragraph. 
2. For payment of preferred debts on the sold objects as per the order to be decided by the Law. 
3. For payment of the preferred debts under Civil Law provisions. 
4. For payment of the normal creditorís debts corresponding to the basis of acceptance of the debt of each of them, including the creditors provided for in the preceding paragraph (2) in case of non-payment of the fully secured debt and the portion which is not covered by such guarantee. 

Article 1121 

Participation of the recently entered Creditors 

The creditors who are entered according to Article (1110) shall not be participated after their entry corresponding to the debt of each of them without prejudice to the right of preference. However, if it is appeared from the judgment issued according to the said ìArticle that the delay was resulted from a reason which they have nothing to do with, they shall participate in the assets which are not distributed regarding the shares to which they would have been entitled in the previous distribution if they were not delayed. 

Article 1122 

Partial Distributions 

When performing partial distributions which should not exceed (90%) ninety percent of the amounts available for distribution, they should be deposited and kept according to the methods indicated by the delegated judge for the shares according to the following: 

1. For creditors residing outside whose debts are not yet verified due to extension of the time limit in their respect.
2. For creditors whose shares are decided to be kept as well as for creditors who are temporarily accepted until they shall submit their documents. 
3. For creditors whose debts are pending on a suspensive condition which is not yet realized, including the debts which could not be adhered to unless after deprivation of a principal debtors. 
4. For meeting the coming expenses which the delegated judge deems necessary for payment of the remuneration and expenses deserved by the receiver. 

Article 1123 

Repayment of the Received Amounts 

In cases provided for in Article (1111) the creditors who were participated in some distributions should repay the amounts which they have received with the legal interests. 

Article 1124 

Payment to Creditors 

The receiver shall pay the amounts allocated for the creditors in the distribution statement in the manner to be decided by the delegated judge. 

Article 1125 

Accounting Data to be provided by the Receive about his Administration 

When the receiver completed the assets liquidation and prior to the final distribution he shall submit an accounting statement about the bankruptcy declaration administration to the delegated judge. 

The judge shall issue an order for lodgment of the statement with Clerical Office and shall fix a session for considering the remarks to be presented by the concerned persons. The session shall be held within fifteen days from the date of lodgment. 

The bankrupt and each creditor shall be immediately notified of the lodgment and appointment of the session. 

The judge shall approve the statement if no objection is raised in the session or the objections were amicably settled, otherwise the judge shall act as per provisions of the Civil and Commercial Code Procedure. The date of the session to be held before the Court shall be fixed within a period not exceeding twenty days from that date. 

Article 1126 

Final Distribution 

If the final statement is approved and the receivers remuneration is paid. The delegated judge shall issue an order for performance of the final distribution according to the previous provisions after hearing the proposals of the receiver in this respect. 

The retained shares shall be distributed with final distribution but in the case provided for by Article (1122) paragraph (3) when the pending condition is not satisfied for payment of the share, the amount shall be deposited in the methods to be decided by the delegated judge so that it could be paid to the entitled creditors or to be distributed as additional shares to the other creditors. 

But the creditors who did not attend or it was difficult to find them; their amounts shall be deposited with one of the banks. 

The deposited certificate shall be considered as a receipt. 

Chapter Eight Closing of the Bankruptcy Declaration 

Branch One Closing of the Bankruptcy Declaration 

Article 1127 

Cases in which the Bankruptcy Declaration shall be Closed 

Without prejudice to the reconciliation provisions, the bankruptcy declaration shall be closed in the following cases: 

1. If no creditor is preceded for acceptance of his debt in the statement on the limited dates shown in the bankruptcy declaration judgment.
2. When the creditors received their debts and their marginal in full fromdistributions as per entered into the statement or expired in any other way after payment of receiversí remuneration and procedures fees even prior to performance of the final distribution. 
3. After performance of the final distribution. 
4. When it shall be confirmed that no benefit is expected from continuation on the progress of the bankruptcy declaration formalities due to lack of sufficient assets. 

Article 1128 

Closing of Bankruptcy Declaration Decision 

The bankruptcy declaration closing shall be closed by a causative decision to be issued by the Court of the First Instance by itself or upon request of the receiver or the bankrupt and shall be published through the methods provided for in the Article (1022). 

This decision may be complaint against to the Court of Appeal within (15) fifteen days from the date of its posting up. The Court shall consider it in a session to be held in form of consulting room after hearing each of the complaint, receiver and the bankrupt. 

Article 1129 

Effect of Closing 

The effects of the bankruptcy declaration shall end up on bankruptís assets by its closing. The bodies entrusted with bankruptcy declaration measures shall also be cancelled. 

The creditors shall regain their right to litigate the debtor for receiving the remaining of their debts and marginal. 

Article 1130 

Cases in which the Bankruptcy Declaration may be Reopened 

In the cases provided for in the third and fourth paragraph of the Article (1127) the Court of the First Instance may issue an order to recommence the bankruptcy declaration measures which have already been closed during (5) five years from the closing date, upon request of the debtor or any creditor, if it is appeared that the bankruptís properties deserving recommencement of the procedures or if the bankrupt submitted a guarantee amounting at least to (10%) ten percent of the demands of the old and new creditors. 

If the Court accepted the application it shall issue, while it is held in form of a consulting room, a judgment not subject to appeal ordering the following: 

The delegated judge shall assign the Creditors Board with observance, in their selection, the new creditor and the judgment shall be declared according to Article (1022). 

The provisions of the preceding chapters shall be followed in respect of the remaining procedures. 

Article 1131 

Union of the Old and New Creditors 

The creditors shall unify in the new distributions with the amounts due to them at the time of appealing against the bankruptcy declaration after deduction of what they have received in the previous distributions, with observance of the preference rights in each case. 

The provisions of the Articles (1102) to (1112) shall be respected. 

Article 1132 

Coming into Force of the Limited Times 

In case of reopening of the bankruptcy declaration, the limited times decided in Articles (10710, 1072, 1075) from the date of judgment of the opening of the lawsuit related to cancellation of the acts performed by the bankrupt after closing of the bankruptcy declaration. 

The dispositions without compensation which shall occur after closing of the bankruptcy declaration and prior to its recommencement shall not apply to the creditors.

Branch Two Reconciliation 

Article 1133 

Who Proposes the Reconciliation? 

After issuance of the decision provided for in Article (1106) the bankrupt may propose reconciliation to his creditors by a petition to be presented to the delegated judge. The petition should include statement of the percentage to be offered to the normal creditors, payment time, with guarantee to be offered by fulfilling the debts, procedures fees and receiver remuneration. 

The receiver shall accept to assign the cancellation lawsuits in favour of anyone who abide by payment as a condition for the reconciliation in the limits of the lawsuits which he has commenced. 

However, he may not assign in favour of the bankrupt or his warrants. 

Article 1134 

Examination and Notification of the Proposal to Creditors 

The judge shall ask for the opinion of both the receiver and the Creditors Board in respect of the reconciliation. If it deems it acceptable he shall pass an order for notifying the creditors immediately through the registered mail or through the approved means of communication accompanied by those opinions and shall assign a limited time to the creditors not less than (20) twenty days and not more than (30) thirty days from the date of the order to declare their disagreement. 

The declaration of the disagreement may be executed on the margin of the notification itself. The votes of the creditors shall be recorded in a particular minutes to be signed by the judge and Court Clerk. 

The delegated judge may suspend the liquidation after offering of the reconciliation. 

The proposal of the reconciliation shall be notified to the joint representative of the loan securities holders if any with addition the limited time granted to the creditors to present the declaration of their disagreement to the clerical office of the Court of the First Instance.

Article 1135 

Reconciliation in case of Multiplicity of Creditors 

If serving of the notice decided in the previous article was default due to the multiplicity of the number, the Court of First Instance may, after hearing the representative of the Public Prosecution and the receiver, authorize the delegated judge to publish the reconciliation proposal as per the legally 

approved methods and in other daily newspaper when necessary along with the receiver opinion and opinion of the Creditors Board. 

Article 1136 

Voting on Reconciliation 

1. The creditors listed in the debts statement shall have the right to vote on the reconciliation even if they have been accepted with reservation or temporarily. 
2. The creditors whose debts are secured by preference or lien shall have no right to voting even if these guarantees are the object of dispute unless they assign their right to the preference. 
3. The assignment may be partial, provided that it shall not be less than one third of the full required right as to original and marginal. Such assignment shall be downright otherwise it shall be considered as a full assignment of the debt guarantee as a whole. The assignment effects shall be ended if the reconciliation is disagreed or disapproved or cancelled or dissolved. 
4. The debtorís wife, relatives, brotherís in-law until the fourth degree and the assignees to whom those relatives have assigned their debts since one year or less prior to the bankruptcy declaration judgment shall be deprived of the voting and majorities counting. 

Transferring the debts effected after declaration of the bankruptcy shall not result in a right to voting. 

Article 1137 

Reconciliation Approval 

The approval of the reconciliation shall occur if accepted by the numerical majority of the creditors who have the right to voting, provided that such majority shall represent at least one third of their debts value.

The creditors who did not declare their disagreement within the limited time shown in Article (1134) shall be considered as agreed to the reconciliation without prejudice to what is provided for by the second paragraph of the pervious article. 

The change to be happen in the number of the listed creditors or the value of the debt of each of them shall not influence the majority accounting due to a judgment to be issued after the date of maturity shown in Article (1134). 

Article 1138 

Session of Certification 

If the date fixed for voting is expired and the two decided majorities are not present, the delegated judge shall declare rejection of the proposed reconciliation by a decision to be written down on the margin of the minutes provided for in the third paragraph of the Article (1134). 

In addition, he shall issue a decision declaring the opening of the certification session which he shall fix its date within a period not less than (15) fifteen days and not more than (30) thirty days. The decision shall be published through posting-up. 

The dissenting creditors and anyone who have an interest therein may raise an objection to the decision by a causative petition of which notice shall be served to both the receiver and the bankrupt provided that they shall enter in the lawsuit at least before (5) five days preceding the session date. 

In the session the judge shall hear the statements of the receiver, litigant parties, chairman of Creditors Board and the bankrupt, and then he shall proceed with procedures according to provisions of the Civil and Commercial Code Procedure. The session shall be fixed before the fixed before the Court in (10) ten days. 

The receiver shall lodge his report with Courtís Clerical Office explaining the reasons with indication of his final opinion prior (5) five days to the session. 

The Creditors Board also may submit a similar report. 

Article 1139 

Certification and Rejection of the Reconciliation 

The Court shall consider all the objections to the reconciliation in one judgment either by certification or rejection after examination of the application and the offered guarantees, and after ascertaining the validity of the procedures and their conformity with provisions of the law of the reconciliation acceptance. 

The certification judgment on the reconciliation shall assign the mode of payment of the amounts due to the creditors in execution of the reconciliation or the same shall be entrusted to the delegated judge who shall pass a decision in this respect. 

If mortgages were submitted in securing the reconciliation, the Court shall, when issuing the certification judgment; a short term limited time within which the receiver shall record those mortgages. 

The judgment shall be published and posted up according to Article (1022). The judgment shall be temporarily implemented. However, the judgment does not become final and the payment fell due, the due amounts should be deposited with one of the bank in execution of the reconciliation. 

Article 1140 

Appeal against the Judgment 

The opponents and the bankrupt may bring an appeal against the judgment issued by certification or rejection of the reconciliation within (15) fifteen days from the posting up. The appeal shall be notified to the receiver, the bankrupt and the litigant parties. 

The appeal judgment shall be published as per provision of Article (1022) and the appeal time shall be reduced in this judgment before the Supreme Court to the half and shall start from the date of publication. 

The bankruptcy declaration procedure shall be closed when the certification judgment becomes final. 

Article 1141 

Prosecution Interference 

The Public Security shall have the right to interfere in the litigation at the level of the Court of the First Instance and Court or Appeal.

Article 1142 

Certification Fees 

The fees of certification of the reconciliation shall be paid out of the cash amounts of the bankruptcy declaration as per decision of the delegated judge, in default thereof; the judge shall pass an order for their entry in the column of the required debts. 

The State Treasury shall recover the expenses which it has spent to the credit of the bankruptcy declaration and what it deserves according to provisions of Article (1100). 

Article 1143 

Accounting Statement of the Receiver 

The receiver must submit an accounting statement according to Article (1125) when the certification judgment of the reconciliation becomes final. 

Article 1144 

Effects of the Reconciliation 

The certified reconciliation shall be binding on all the creditors who their debts preceding the bankruptcy declaration including the creditors who did not apply for acceptance of their debts, but the guarantees submitted by the third parties for reconciliation did not include their debts. 

The creditors shall keep their lawsuit for claiming their full right against those who under joint obligation with the bankrupt, his warrants and the other obligors through recourse. 

Article 1145 

Reconciliation Execution 

After certification of the reconciliation, each of the delegated judges, receiver and the Creditors Board shall supervise it fulfillment as per the methods applicable in reconciliation judgment. 

The amounts due to the objected creditors or entered on condition or who their inference is difficult shall be deposited as per the methods assigned by the delegated judge.

After verification of execution of the whole reconciliation, the delegated judge shall pass an order for lifting the restriction on the guarantees and striking out the mortgages submitted in securing the reconciliation. 

The order shall be published and posted up according to Article (1022) and all expenses thereof shall be incurred by the debtor. 

Article 1146 

Cancellation of Reconciliation 

If the guarantees are not submitted or if the bankrupt did not meet his obligations regularly according to reconciliation conditions and provisions of certification judgment, the receiver must notify the Court of the same. The Court shall pass an order for presence of the bankrupt and his warrants if any and shall cancel the reconciliation by a judgment not subject to appeal to be issued by while holding in the form of consulting room. The Court shall perform the same action upon request of one or more creditors or by itself. 

The Court of First Instance shall open the bankruptcy declaration procedures based on the reconciliation cancellation judgment. 

Cancellation judgment may not be issued after expiry of one year from maturity of the last installment decided in the reconciliation. 

The provisions of this Article shall not be applied if a third party has undertaken to meet the obligations of the debtor resulting from the reconciliation with immediate relief of his obligation. 

Article 1147 

Reconciliation Revocation 

The Court may revoke the certified reconciliation upon a petition to be brought by the receiver or any of the creditors against the debtor, if it is appeared that the bankrupt debts are exaggerated by fraud or gross concealment of his assets. 

No other revocation lawsuit shall be accepted. The reconciliation revocation judgment shall include temporary execution and shall result in re-opening of the bankruptcy declaration procedures. 

The revocation lawsuit shall be brought within (6) six months from fraud discovery, in any way; it shall be in a period not exceeding (2) two years from the maturity of the last installment decided in the reconciliation.

Article 1148 

Procedures of Re-Opening of the Bankruptcy Declaration 

The opening of the bankruptcy declaration judgment under Articles (1146 &1147) shall provide for taking the arrangements and measures provided for in the second paragraph of Article (1130) and the next paragraph. 

Article 1149 

Effects of the Opening 

The Articles (1131 & 1332 shall organize the opening effects. The lawsuit of cancellation may be renewed if suspended due to reconciliation. 

The previous creditors shall keep the guarantees in the proportion of the amounts which they deserve upon the reconciliation which has been revoked or cancelled. Also they shall not be under obligation to recover what they have received. 

They shall unify with other creditors with their principal debt after deduction of what they have received due to partial execution of the reconciliation. 

Article 1150 

Proposal of the New Reconciliation 

When the debts statement is given the force of execution, the debtor shall be allowed to propose a new reconciliation. Such reconciliation may not be certified, if the amounts necessary for full payment thereof in the manner to be assigned by the delegated judge, are not lodged before the concerned 

session. 

Chapter Nine Civil Rehabilitation 

Article 1151 

Effects of Rehabilitation 

The Court of First Instance shall decide the rehabilitation in the cases provided for in the following Articles upon request of the debtor or his successors by a judgment to be issued in a form of consulting room after hearing the Public Prosecution.

The judgment shall provide for striking the bankrupt name out the register provided for in Article (1055) and the judgment shall be communicated to the Commercial Register office for recording it therein. 

The judgment on rehabilitation shall result in expiration of the case of preventing the bankrupt from disposing of his properties resulting from bankruptcy declaration judgment. 

Article 1152 

Rehabilitation Conditions 

The bankrupt may be rehabilitated in the following cases: 

Article 1153 

Procedures of Rehabilitation 

The rehabilitation petition shall be declared through posting up on the Court signboard. The Court may pass an order to follow other methods for declaration. 

Anyone who wants to raise an objection to the rehabilitation may lodge his objection aspect with Clerical Office within (30) thirty days from posting up. 

Each of the debtor or his successors, opponents or the Public Prosecution shall have the right to challenge this judgment within (15) fifteen days from posting up. The Court shall consider thereof while it is held in form of consulting room. 

Article 1154 

Criminal Penalties Preventing the Reconciliation 

In any way, if the bankrupt is judged by fraudulent bankruptcy declaration or by one of the funds crimes or breach of faith or public economy or industry or trade he may not be rehabilitated unless he gained rehabilitation in respect of these crimes according to Penal Law. 

If there are existing procedures regarding these crimes, the Court shall suspend the rehabilitation procedures until consideration of those criminal procedures. 

Chapter Ten Declaration of Companies Bankruptcy 

Article 1155 

Responsible Management, General Managers, Comptroller and Liquidators 

The Chairman and member of the Board of Directors, Companies Managers and Liquidators shall be subject to the restrictions imposed on the bankrupt upon Article (1054). They should be heard in all the cases on which the law imposes hearing the bankrupt. 

The receiver in bankruptcy when authorized by the delegated judge after hearing the Creditors Board shall assume the lawsuit against the Chairman and members of Board of Directors, Administrators, General Managers, Liquidators, Chairman and members of the Control Board and External Auditor, in any, in what is related to their responsibilities provided for in this Law. 

Article 1156 

Companies in which their Partners have no Limited Responsibility 

If a trading company is declared bankrupt, the partners shall be unlimitedly and jointly responsible for its debts and the bankruptcy declaration shall apply also to those partners.

If it is appeared, after judgment of the companyís bankruptcy declaration, that there are other partners to whom the provision of the previous paragraph applies, the Court of First Instance shall declare the bankruptcy of those partners upon request of the receiver or by itself after hearing them in a session to be held in form of consulting room. 

The objection to the Court judgment shall be accepted according to Article (1023). 

Article 1157 

Declaration of Bankruptcy of the Companies and Partners 

In the case which the previous article provided for nomination of a judge and receiver by the Court of First Instance either for declaration of bankruptcy of the company or the partners. However, it may nominate various Creditors Board. 

The funds of the company shall be completely separated from those of the partners. 

The debts to be declared by the company creditors in its bankruptcy shall be considered as fully declared in bankruptcy of each of the partners. The company creditor shall have the right to participate in all the distributions until he receives his right in full, with respect of the partners right to recourse to the bankruptcy declarations each other for receiving what they have paid in excess of their shares in the debts. 

But the personal creditors of the partners shall not participate except in the bankruptcy declaration of their indebted partners. 

Any creditor shall have the right to object to the debts of the creditors unified with him. 

Article 1158 

Partnerís bankruptcy declaration 

Declaration of bankruptcy of a partner or more of the unlimited responsibility partners shall not result in declaration of the company bankruptcy. 

Article 1159 

Payment of stocks and shares

In declaration of bankruptcy of the companies in which the partnerís responsibility is limited, the delegated rule may ask the limited responsibility partner and the former holders of allotment and shares to pay their remaining installments even if they are not yet fall due, by a resolution to be issued upon request of the receiver in bankruptcy. 

Article 1160 

Cooperation companies 

In case of declaration of bankruptcy of cooperative companies in which the additional responsibility of the partners is limited or unlimited, the delegated judge may, after issuance of the resolution provided for in article (1106) permit the receiver to claim the partners for payment of the amounts necessary for settling the debts according to the provisions related to partners responsibility and their share in profits and losses. 

The allotments of the partners who are unable to make payment shall be borne by the other partners. 

The receiver shall prepare a distribution statement to be lodged with court clerical office and shall communicate the same to the partners by registered letter accompanied by acknowledging receipt or by the legally approved means of communication. 

Any of the partner who wants to submit whatever remarks and appeals even regarding description of the partner and the extent of his responsibility, shall lodge the aspects of his objection with court clerical office within forty days from lodgment of the distribution statement. 

The delegated judge shall introduce the modifications and amendments which he deems appropriate to such statement after hearing the receiver with consideration of the remarks and appeals. 

The distribution statement, shall be effective by a resolution to be issued by the judge and lodged with clerical office whereas the concerned persons shall be allowed to see them. 

Anyone who appealed against description of any of the partner, shall raise his objection against the receiver before the court of the first instance within fifteen day from lodgment of the distribution statement with clerical office. 

The objection shall not stop the execution of the distribution statement even against the objector. In other cases the complaint shall be brought according to article (1031).

If it is appeared that fulfillment of some allotments listed in the distribution statement is difficult, an addition statement is may be drawn up as per provisions of the previous paragraphs all that without prejudice to the lawsuit of recourse between the partners and the remaining amounts shall be reimbursed after fulfillment of the debts. 

To ensure fulfillment of the allotments from partners, the delegated judge may upon receiverís proposal, pass an order an order at any time for distraining the properties of the partners themselves. 

Article 1161 

Proposal of reconciliation 

The reconciliation proposal shall be signed by the legal representative of the bankruptcy company. 

In joint liability companies and limited partnerships, the proposal and its conditions should be approved by a number of partners representing the absolute majority of the capital. 

But as regards the joint stock companies, limited shares partnership, limited liability companies as well as limited responsibility cooperative company, the extraordinary general assembly should approve thereof unless such powers are entrusted to the board of directors or the directors. 

Article 1162 

Reconciliation effect on the company 

The conciliation which shall be concluded by training company in which the responsibility of the partners shall be unlimited and joint and shall put an end to their bankruptcy, unless otherwise agreed upon. 

However, the personal creditors of the partners may raise objection to the closing of the bankruptcy declaration of their debited partner according to provision of the fourth paragraph of the article (1138). 

The court of the first instance shall consider the objection under a final judgment to be issued in form of a consulting room.

Article 1163 

Partnerís reconciliation 

Any partner who declared his bankruptcy due to the declaration of bankruptcy of a trading company in which the partners responsibility is unlimited and joint, may propose the reconciliation to the company creditors and his unified creditor in his own declaration of the bankruptcy. 

Chapter Eleven Short procedure 

Article 1164 

Conditions and rules to be applied 

If it is appeared, on issuance of the bankruptcy declaration judgment or due to investigation in the validity of the debts, that the claims against the debtor do not exceed fifty thousand dinars, the judges shall pass an order through the bankruptcy declaration judgment or by a further decision to be published as per article (1022), for conduction or continuation of the bankruptcy declaration by a short procedure. However if it is appeared in a second phase that the debts value is more than fifty thousand dinars, the judge should inform the court of the first instance which shall pass an order for continuation of the bankruptcy declaration as per the usual rules without prejudice to the measures which have been taken. 

The provision of the bankruptcy declaration shall be applied to the short procedure in the limits which do not contract the following provisions. 

Article 1165 

Bodies and precautionary measures 

The assignments of the delegated judge may be entrusted to the judge of the summary justice of the authority which the main business office of the bankruptcy falls under its area of jurisdiction. The nomination of the creditors board shall be optional and the seals may not be put.

Article 1166 

Verification of the debts 

The receiver shall prepare a list of creditors to be extracted from the commercial books and documents, debtorís statement and other information which he shall obtain. 

This list along with its justifying documents shall be presented to the delegated judge who will prepare, in his return, the creditors list and shall pass an order for its execution and lodgment with clerical office, where it could be seen. 

The receiver shall notify each creditor of what is concerning him by a registered letter accompanied by acknowledging receipt or by the legally approved means of communication within three days from the lodgment. The creditors who are not included in the debts statement may bring, during the same period, their objection to their prevention. Objection may be raised also to the debts of other creditors included in the statement. 

The judge shall fix the date of the session for consideration of the objections and complaints. He shall have to try to settle the disputes amicably, otherwise he shall consider them in one judgment. 

Article 1167 

Petitions for recovery, regaining and separation of movables fromeach other 

The provisions of the previous article shall be applied also to recovery, regaining and separation of the movables, which are in possession of the bankrupt, from each other. 

Article 1168 

Reconciliation 

The reconciliation proposal shall be considered acceptable if agreed upon by the majority of creditors who have the right of section in number and value. 

The judge shall issue the reconciliation judgment after confirming presence of the majority shown in the previous paragraph whenever he deems it appropriate and shall issue on an order for its implementation.

Chapter Twelve Penalties 

Branch One Crimes to be committed by the bankrupt 

Article 1169 

Declaration of bankruptcy by fraud 

Any merchant who declare his bankruptcy and it is appeared that he has: 

They shall be penalized by imprisonment for a period not exceeding five years. 

The same penalty shall be applied to the merchant who declared his bankruptcy and committed, during the bankruptcy declaration, one of the acts provided for in item (1) or concealed or destroyed or falsified his books or other accounting entries. 

Any bankruptcy who have paid the debts of some of his creditors or granted them privileges in order to cause damage to other either during the bankruptcy declaration or in the doubt period shall be penalized by imprisonment for a period not less than six months. 

The judgment to be issue on one of the crimes provided for in this article shall result in disqualification of the convicted person from practicing any commercial activity or assuming a manager position in any institution for a period ranging between two to ten years, without prejudice to any other consequential penalty provided for in the penal code.

Article 1170 

Negligent bankruptcy 

Without prejudice to provisions of the previous article, any merchant who declared his bankruptcy and it is appeared that he has done one of the following acts, he shall be imprisoned for a period not exceeding one year. 

1. Spending on his personal or family expenses enormous amounts not appropriate to his economic condition 
2. Consuming a great part of his properties in various gambling operations. 
3. Perform a non-permissible operation for delaying his bankruptcy declaration. 
4. Increasing the pressure of his insolvency and disturbance movement of his work by neglecting to apply for declaration of his bankruptcy or by other gross error. 
5. Not fulfilling his obligations which he in a previous preventing reconciliation or bankruptcy. 

The same penalty shall be applied to the bankrupt who did not keep his other commercial books and entries which are imposed by law or breached their keeping in a regular manner during the three years preceding the bankruptcy declaration or from the date of commencement of his work if its duration isles than that. 

The previous judgment on one of the crimes provided for in this article shall result in disqualification for practicing a commercial activity or to assume the post of a manager in any institution for two years. 

Article 1171 

Aggravating and extenuating circumstances of the penalty 

The established penalties shall be aggravated in two preceding articles to an extent not exceeding the half if gross damages have arisen out of commitment of the acts provided for therein or the perpetrator was prohibited from performing any commercial activity under the law. 

But if the acts provided for in the first paragraph have resulted in slight damage the penalties shall be reduced to one third.

Article 1172 

An exceptional case 

Any merchant who entered in existing creditors in the debtors list or failed to declare of existing of his properties for entry into the inventory or not respected the restrictions imposed on him as per provisions of paragraph (3) of articles (1021) and (1054) shall be penalized by imprisonment for a period not exceeding one year and a fine not less than one hundred dinars and not exceeding one thousand dinars or by both penalties. 

Article 1174 

Declaration of bankruptcy of the persons companies 

In declaration of bankruptcy of the joint liability companies and limited partnerships, the provisions of this chapter shall be applied to acts to be performed by joint partners and the acting partners. 

Branch Two Crimes to be committed by other than the bankrupt 

Article 1175 

Fraud crimes 

The provisions provided for in article (1169) shall be applied to the chairman and members of the board of directors, administrators, general mangers, chairman and members of the control board, external auditor if any and the liquidator of the company which is declaring its bankruptcy if they committed one of the acts provided for in the said article. 

The same penalty shall be applied to them if they caused the companyís bankruptcy declaration by deceit or fraudulent methods. 

Article 1176 

Accountability of administrators 

The penalties provided for in article (1170) shall be applied to the chairman and members of the board of directors, administrators, general managers, chairman and members of the control board, comptrollers, external auditor if any and the liquidator of the company which is declaring its bankruptcy:-

Article 1177 

Crimes to be committed by company managers and liquidators 

The penalties provided for in article (1172) shall be applied to the responsible of management, acting managers and liquidators of the companies that declaring their bankruptcy if they committed one of the acts provided for in that articles. 

Article 1178 

Crimes to be committed by the commercial agent 

The penalties provided for in articles (1170, 1172) shall be applied to the commercial agent of a merchant who declared his bankruptcy if the committed one of the acts shown therein. 

Article 1179 

Crimes to be committed by the receiver 

Without prejudice to any other aggravating penalty, any receiver who procured directly or through another person, personal benefit from any bankruptcy declaration operation or due to false operations performed by him unless the committed act is not penalized according to provisions of the penal code in respect of public servants, shall be amerced by a fine not less than one thousand dinars and not more than five thousand dinars. 

Article 1180 

Receiving the undue remuneration 

Any receiver in bankruptcy who received a cash remuneration or through any other way or agreed thereupon in excess of the remuneration estimated to him by the court of the first instance or the delegated judge, shall be amerced by a fine ranging between one hundred dinars and five hundred dinars. 

In very serious cases the judgment may provide for preventing him from assuming the job as a judicial expert for two years.

Article 1181 

Abstention from delivery or deposit of amounts by the receiver 

Any receiver who, by the virtue of his job, possesses amount or other objects regarding the bankruptcy declaration and breached the judge order to deliver or deposit thereof shall be penalized by imprisonment for a period not exceeding two years and a fine not exceeding one thousand dinars. 

If the act resulted in an error, the penalty shall be imprisonment for a period not exceeding six months or a fine not exceeding one thousand dinars. 

Article 1182 

Infliction of penalty on receivers assistants 

The provision of articles (1179, 1180, 1181) shall be applied also to the persons who have assisted the receiver in management of the bankruptcy declaration affairs. 

Article 1183 

Inclusion the list of creditors by fraud 

Anyone who submitted a petition for acceptance among the creditors on false debt by fraud either by himself or by another person unless he is a partner in bankruptcy declaration by fraud. 

If the petition is withdrawn before investigation into the debts, the penalty shall be inflicted on each one who: 

1. Concealed or hid or received properties of the bankruptcy or mentioned thereof contrary to the truth after bankruptcy declaration unless he is a partner in the bankruptcy declaration by fraud. 
2. Concealed or received goods or other properties of the bankrupt with knowledge of his insolvency condition and disturbance of his activity, as well as anyone who bought such properties at cheap price in comparison with their true value whenever the bankruptcy is actually occurred. 

Article 1184 

Manipulation into votes 

Any creditor agreed with bankrupt or another person against special benefit to give his vote in favor of the bankrupt in the creditors board resolution. The amount or the objects procured by the creditor shall be confiscated.

The same penalty shall be applied to the bankrupt and anyone who have contracted with the creditor in favor of the bankrupt. 

Article 1185 

Practicing of a commercial activity during existence of the prohibition 

Anyone who practiced a commercial activity in spite of his disqualification to so due to a criminal judgment provided for in this book shall be amerced by a fine not less than one thousand dinars and not exceeding three thousand dinars. 

Branch Three Provision to be applied to the preventive reconciliation 

Article 1186 

Crimes to be committed in preventive reconciliation 

Any merchant who arrogated to himself in existing properties or rights with intention to gain acceptance in a preventive reconciliation, as well as, if he invented in existing debts with intention to influence majority formation, shall be amerced by a fine not less than one thousand dinars and not more than three thousand dinars. 

In case of the preventive reconciliation in respect of companies, the penalty shall be applied to the chairman and members of the board of directors, administrators, external auditor and the liquidator. The same penalty shall be applied also to the commission merchant, comptroller of the preventive reconciliation and the creditors provided for in article (1184). 

Branch Four Provisions of procedures 

Article 1187 

Bringing of lawsuit 

The criminal lawsuits shall be brought on crimes provided for in articles (1169, 1170, 1175, 1176) and after notification of the bankruptcy declaration judgment according to article (1022).

The lawsuit may be brought prior to the limited time in the case provided for in article (1014). In other case where serious reasons appear whenever the application for bankruptcy declaration have already been submitted or have been at the same time. 

Article 1188 

Claiming for right of compensation. 

The receiver and the judicial comptroller may enter in the lawsuits civil rights claimant in proceedings of the lawsuits related to crimes provided for in this chapter against the bankrupt also. 

Article 1189 

Creditors right of compensation 

The creditors shall have the right to claim for the civil rights and compensation for damages in the criminal lawsuits for fraudulent bankruptcy if the receiver or the judicial compensation did not do so or if they decided to bring a lawsuit regarding personal rights. 

Article 1190 

Effects of rehabilitation 

The civil rehabilitation for the bankrupt shall result in expiry of the crime of the negligent bankruptcy. If there is a criminal judgment thereon, its execution may be stayed and its effects shall be finished.