49. Circumstances in which Company may be wound up by Court

A Company may be wound up by the Court if:

• (a) the Company has resolved that it be wound up by the Court; or
• (b) the Company is Unable to Pay its Debts; or
• (c) a moratorium for the Company under section 9 (Moratorium) comes to an end and there is no Voluntary Arrangement approved under Part 2 (Company Voluntary Arrangements) in relation to the Company; or
• (d) the Court is authorised to make the order under any other AIFC Regulations or any AIFC Rules; or
• (e) the Court is of the opinion that it is just and equitable that the Company should be wound up.

50. Definition of Unable to Pay its Debts

(1) A Company is taken to be Unable to Pay its Debts if:

• (a) a creditor to whom the Company is indebted in a sum exceeding U.S. $2,000 then due has served on the Company a Written demand requiring the Company to pay the sum so due and the Company has for 3 weeks afterwards neglected to pay the sum or to agree terms in relation to its payment to the reasonable satisfaction of the creditor; or
• (b) execution or other process issued on a judgement, decree or order of any court in favour of a creditor of the Company is returned unsatisfied in whole or part; or
• (c) it is proved to the satisfaction of the Court that the Company is unable to pay its debts as they fall due.

(2) A Company is also taken to be Unable to Pay its Debts if it is proved to the satisfaction of the Court that the value of the Company’s current assets is less than the amount of its current liabilities, taking into account its contingent and prospective liabilities.

(3) In this section: Company includes a Recognised Company.

51. Application for winding up

Subject to any other AIFC Regulations or any AIFC Rules to the contrary, an application to the Court for the winding up of a Company may only be presented by the Company, the directors or any creditor or creditors (including any contingent or prospective creditor or creditors).

52. Petition for winding up on grounds of interests of AIFC

If it appears to the AIFCA that it is in the interests of the AIFC that a Company should be wound up, the AIFCA may present a petition for the Company to be wound up if the Court considers it just and equitable for it to be wound up.

53. Voiding of property dispositions

In a winding up by the Court, any disposition of the Company’s property, and any transfer of shares or alteration in the status of the Company’s members, made after the commencement of the winding up is void unless the Court otherwise orders.

54. Voiding of attachments

If a Company is being wound up by the Court, a Person must not attach, sequester or otherwise appropriate the assets of the Company after the commencement of the winding up, and any such activity is void unless the Court otherwise orders.

55. Consequences of winding up order

If a winding up order is made for a Company, no legal proceeding may be continued or commenced against the Company or its property without the leave of the Court and subject to the terms that the Court may impose.

56. Procedures and Functions of Liquidator appointed by Court

Without limiting section 25 (Powers etc. of Liquidators), the Rules may make provision for or in relation to the procedures and Functions of a Liquidator of a Company appointed by the Court.

57. Choice of Liquidator by Court or meetings of creditors and contributories

(1) If the Court orders that a Company be wound up, the Court must, in the order, appoint a Person as liquidator of the Company. The Person appointed as liquidator becomes the Company’s Liquidator on the making of the order. The Person may either continue the liquidation or call meetings of the Company’s creditors and contributories to nominate a Person to be liquidator of the Company.

(2) The creditors and the contributories at their respective meetings may nominate a Person to be liquidator.

(3) The Person nominated by the creditors is taken to have been appointed as the Company’s Liquidator or, if a Person is not nominated by the creditors, the Person (if any) nominated by the contributories is taken to have been appointed as the Company’s Liquidator.

(4) However, if the creditors and contributories nominate different Persons, any creditor, shareholder or other Person liable to contribute to the assets of the Company may, within 7 days after the day the nomination is made by the creditors, apply to the Court for an order either:

• (a) appointing as the Company’s Liquidator the Person nominated by the contributories instead of, or jointly with, the Person nominated by the creditors;or
• (b) appointing another Person as the Company’s Liquidator instead of the Person nominated by the creditors.

58. Appointment of Provisional Liquidator

The Court may, at any time after the presentation of a winding up petition for a Company, appoint a liquidator provisionally for the Company. The powers of the Provisional Liquidator may be limited by the order appointing the Provisional Liquidator.

59. Appointment of liquidation committee

(1) At the meeting of the creditors of a Company held under section 57 (Choice of Liquidator by Court or meetings of creditors and contributories) or at any subsequent creditors meeting, the creditors may appoint a committee (a liquidation committee) of not more than 5 individuals to Exercise the Functions given to the committee under these Regulations and the Rules.

(2) If a liquidation committee is appointed under subsection (1), the Company may, at any time in general meeting, appoint not more than 5 individuals as members of the committee.

(3) However, the creditors may resolve that all or any of individuals appointed by the Company as members of the liquidation committee ought not to be members of the committee.

(4) If the creditors so resolve:

• (a) the individuals mentioned in the resolution cease to be eligible to be members of the liquidation committee, unless the Court otherwise directs; and
• (b) on an application to the Court under this subsection, the Court may appoint other individuals to be members of the liquidation committee instead of individuals mentioned in the resolution.

60. General Functions of Liquidator in winding up by Court

The Functions of the Liquidator of a Company that is being wound up by the Court are to ensure that the assets of the Company are got in or otherwise secured, realised and distributed to the Company’s creditors and, if there is a surplus, to the Persons entitled to it.

61. Vesting of Company property in Liquidator

(1) If a Company is being wound up by the Court, the Court may direct that all or any part of the property of any description belonging to the Company, or held by trustees on its behalf, vest in the Liquidator.

(2) The Liquidator may bring or defend any legal proceeding that relates to property vested in the Liquidator or that it is necessary to bring or defend to wind up the Company and recover its property.

62. Power to stay winding up

The Court may at any time after an order is made for the winding up of a Company, on the application of the Liquidator, or any creditor, shareholder or other Person liable to contribute to the assets of the Company, and on proof to the satisfaction of the Court that all proceedings in the winding up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time, on the terms and conditions the Court considers appropriate.

63. Power to exclude creditors not proving in time

If the Court is satisfied that all necessary steps have been taken to draw the liquidation of a Company to the attention of creditors, the Court may fix a time or times within which creditors must prove their debts or claims or be excluded from the benefit of any distribution made before the debts or claims are proved.

64. Payment of expenses of winding up

If the assets of a Company that is being wound up by the Court are insufficient to satisfy its liabilities, the Court may make an order about the payment out of the assets of the expenses incurred in the winding up in the order of priority that the Court considers just.