As Saudi Arabia continues to strengthen its restructuring and insolvency framework, the practical application of the Bankruptcy Law by the Commercial Courts and officeholders is playing a defining role in shaping outcomes for debtors and creditors alike. Several trends have now emerged that provide insight into how the regime is evolving in practice.

A clear pattern has been the rise of debtor-initiated filings, often used as a defensive step to pause enforcement actions or to manage financial distress proactively. At the same time, we have seen growing scrutiny around the acceptance of claims, with some courts and officeholders requiring final, non-appealable judgments — a threshold that the Bankruptcy Law itself does not expressly impose.

Other areas of interpretation continue to generate discussion. These include:

• The treatment of funded vs non-funded credit lines when calculating claim values;
• The scope and duration of claim suspension, which in some cases has overlapped with parallel enforcement actions;
• The non-extinguishment of unaccepted claims, raising questions about how finality for debtors can be achieved; and
• Continued uncertainty around class formation and voting thresholds, especially in cases involving related parties.

The role and definition of secured creditors also remains a point of divergence, particularly regarding whether only security over tangible assets qualifies. Additionally, both debtors and creditors have expressed concern about delays in meeting statutory timelines, which can undermine efficiency and predictability.

These developments reflect a system that is maturing but still confronting practical challenges as stakeholders navigate a complex legal and commercial landscape.

I will be discussing these trends in more depth at our upcoming event, where we will explore how companies, creditors, and advisers can better prepare for restructuring processes under Saudi Arabia’s evolving insolvency framework.