The legal consequences of promulgation of the liquidation decision on the Bank’s Board of Directors in pursuance of the provisions of the Jordanian legislation

Abstract

The study addressed the legal effects of the promulgation of the liquidation decision on the Bank’s Board of Directors in pursuance of the provisions of the Jordanian legislation. The commercial banks essentially are public shareholding companies, and while the company (bank) is exercising its natural life, one of the abatement reasons may be established. Therefore, the bank comes into a new role of its life cycle, namely the liquidation role. Since the bank is basically a joint-stock company, it has a board of directors to represent it as agent expressing their desires and manages their financial receivables and payables and enters into the legal acts with others for and on behalf of the bank and represents it before the justice. Whereas the board of directors is the legal representative of the bank during its natural life cycle, the question raises about the impact of the liquidation decision on the board of directors during the liquidation stage. Therefore, the relevance of this study lies in clarifying the legal impact of the promulgation of the decision for liquidating the bank particularly and the public joint-stock company in general on the board of directors through making clear survival of the board during the liquidation state; clarifying the legal liability of the members during the abnormal stage. As is well known, the legal research is qualitative but non-interactive; and that accounts for the descriptive approach used by the author through review of the legal provisions and jurisprudence in relation to the study topic in addition to the analytical approach through analyzed legal provisions in an attempt to devise legal rules through the de facto law application and to what extent the judicial decisions are consistent with the legal provisions. To this end, the study has been divided into two chapters. The first chapter dealt with the survival of the Board during the liquidation phase. The second chapter examined the responsibility of the Board members during the liquidation phase to the Bank, shareholders and others through a review of all legal provisions in relation to the study subject in the Deposit Insurance Corporation Law- Jordan, Jordan Banking Law, Companies Code, as amended, Central Bank of Jordan Law and Jordanian Civil Code.