THE IMPACT OF BANKRUPTCY ON COMMERCIAL TRANSACTIONS

Abstract

Summary of the thesis titled “The Impact of Bankruptcy on Commercial Transactions”: 1. Overview: This master’s thesis, submitted by us at Ziane Achour University in Djelfa, analyzes how bankruptcy affects various commercial transactions under Algerian law. It also explores the traders or anyone engaging in commercial transactions view toward bankruptcy legislation . 2. Main Objectives: • Define bankruptcy and distinguish it from general business failures. • Explore how commercial transactions are influenced before, during, and after bankruptcy proceedings. • Analyze a Algerian legislation’s strengths and weaknesses concerning bankruptcy. 3. Legal Framework: The thesis relies on: • Algerian Commercial Code provisions (notably Articles 215–388). • Comparative insights from French and Egyptian law. • Principles such as the restriction of the debtor, equality among creditors, and judicial oversight. 4. Key Topics Covered: a-Bankruptcy System in Algerian Law • Definition & Types: • Simple (good faith), negligent, and fraudulent bankruptcies. • Consequences: - Impacts on debtor’s rights, political status, and property. • Rehabilitation: - The process for a bankrupt individual to regain legal and commercial standing. b. Definition of commercial transactions and their distinction from business and the types of Commercial Transactions affected by bankruptcy: • Definition of commercial transactions and their distinction from business. • Absolutely void vs. arbitrarily void contracts. • Contracts involving traders and companies—especially their legal validity post-bankruptcy. • Influence on mixed or cross-border transactions. c. Practical Impacts of Bankruptcy • On liquidation: - How assets and liabilities are managed. • On restructuring -: Tools like debt rescheduling and business reorganization. • On stakeholders: - Shareholders and bondholders face risks in equity and debt recovery. - Investors and creditors face disruptions and may form collectives for asset distribution. - Foreign creditors are included if the bankruptcy has cross-border implications. 5. Methodology: A mix of descriptive and analytical approaches was used, including a review of legal documents and legislative texts. - Analyzing the opinions of legal experts and academics. 6. Conclusion & Findings: • Algerian commercial law aligns in some areas with global standards but has gaps— especially regarding non-merchant bankruptcies and contract clarity. • The legal system should promote transparency, contract reform (especially around bankruptcy clauses), and alternative resolution methods like arbitration.