Tehran Courts Assigned Two Special Branches for Insolvency and Bankruptcy Cases

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Nourlaw-16 May 2018-Tehran– In light of the increasing list of persons who are indebted to the banks due to the high loans they have received, the number of bankruptcy and insolvency has arisen accordingly. However as reported by Mizan News Agency, some of these applications are fraudulent schemes to avoid repayment of the principal and related penalties.

Mr. Abbas Ali Poriani, the director-general of the general and revolutionary courts of Tehran announced two special branches of Shahid Beheshti Courthouse in Tehran are now dedicated solely to cases of bankruptcy and insolvency. He noted that each month, some 90 applications of bankruptcy and liquidation of companies are filed with the courts of Tehran. He said that investigations show that some of the persons who have applied for the issuance of an insolvency verdict, were not in fact insolvent and had abused the legal relief afforded by an insolvency application.

He stated that to oversee and halt any possible abuse and for protecting the public treasury and national assets, two special branches will now deal exclusively with insolvency and bankruptcy applications in Tehran, so the judges at these courts are in a position to investigate and reject applications in cases wherein the company is not really bankrupt.

Mr. Poriani said, “Investigations show that most of the people who applied for bankruptcy have received huge amounts of credit from the banking system. In one instance a person who had received 3,000 to 4,000 billion Rials from the bank, has now applied for bankruptcy, pretending to be insolvent, while his personal fortune may have risen up to 30,000 billion Rials”!

He urged banks and the Central Bank of Iran to get involved in these matters for preventing violation of people’s rights. He added that if the banks have documents concerning persons who have applied for bankruptcy and insolvency, they can work together with the courthouses so that fair verdicts can be issued in such matters.