Regulatory Alerts2015-10-26 | 12116Added · Updated
Basic Decision No. 12116 of 26/10/2015 on Debt Restructuring
Basic Decision No. 12116 establishes the framework for restructuring non-performing loans classified as 'Under Surveillance and Settlement', 'Doubtful', or 'Bad' under Central Bank of Lebanon regulations. It permits restructuring through agreement between debtors and creditors, requiring approval from banks holding at least 60% of the debt and a two-thirds majority of creditor institutions. The decision mandates that restructuring agreements exclude dissenting creditors, prohibits individual enforcement actions during negotiations, and allows for debt write-offs, asset-for-debt swaps, and new financing to reactivate economic activity. It further requires the reclassification of restructured debts to 'Under Surveillance and Settlement', prohibits profit distribution from such debts, and grants supervisory authorities oversight powers over the implementation and any administrative or liquidation measures.