The Central Bank of the United Arab Emirates has required UAE lenders with exposure to feuding Al Saad Group and Ahmad Hamad al Gosaibi & Brothers to increase their loan loss provisions from 50 to 80 percent. The requirement issued in a circular to all UAE lenders is designed to protect UAE financial institutions from a worst case fallout of the dispute between the two groups.
"All these provisions must be by the end of 2010 and the Central Bank's approval of the banks' annual audited results are conditional on the allocation of those provisions," UAE Central Bank Governor Sultan Nasser al-Suweidi said in the circular.
The circular comes a year after the Central Bank ordered lenders to raise provisions related to Al Saad and Al Ghosaibi to 50 percent. It follows press reports that Saad had offered Kuwaiti lenders a settlement based on payment of $0.20 for each dollar the group owes. The press reports said lenders were negotiating for up to $0.40 on the dollar.
The Central Bank circular asked banks to maintain their 100 percent provisions Saad Group’s Bahrain-based Awal Bank and Al Gosaibi’s The International Banking Corp (TIBC) that were taken over by the Bahraini central bank last year. The difference is provisioning ratios reflects the Central Bank’s assessment of exposure by UAE lenders to those entities and the likelihood that lenders will be able to recover their outstanding loans.
Defaults on loans by Awal Bank TIBC set off a bitter legal battle on three continents between the two groups that are related by Saad Group’s Maan al Sanea’s marriage to a daughter of the Al-Ghosaibi family. Al-Gosaibi has accused Al-Sanea in court filings on three continents of siphoning off $10 billion from his in-laws.
Al Gosaibi is seeking to recover $9.2 billion in lawsuits in the Cayman Islands against al-Sanea and Awal subsidiaries. Court proceedings involving Awal are also ongoing in the United States, Bahrain, Kuwait, Saudi Arabia, Switzerland and Britain.
A Chapter 11 filing by Awal in New York has suggested that the bank may file for liquidation in Bahrain. According to its court filing, Awal has assets valued at most at $100 million and liabilities of more than $1 billion. Under Bahrain law, the administrator has until the summer of 2011 to decide whether to liquidate Awal or return it to its owners.
Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal is beyond salvation and should be liquidated. In its filing, Awal asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.
Showing posts with label Al Gosabi. Show all posts
Showing posts with label Al Gosabi. Show all posts
Monday, December 27, 2010
Friday, November 5, 2010
Awal Bank Asks US Court For Deadline Extension
Charles Russell LLP, the Bahrain-appointed administrator of Awal Bank BSC, a subsidiary of Saudi Arabia’s embattled Saad Group owned by Saudi billionaire Maan al-Sanea, has asked a U.S. court for an extension of the deadline to file schedules of assets and liabilities and a statement of financial affairs in the bank’s application for Chapter 11 bankruptcy protection.
The request follows rejection last week by the New York court of Awal Bank’s initial application for limited Chapter 11 because the troubled bank was asking to be allowed to keep information confidential and to be exempted from the need to create a U.S. creditors committee. At the same time, U.S. Bankruptcy Judge Allan Gropper kept the door open for Awal to repetition the court provided it the bank agreed to establish such a committee. Gropper said he would allow more time to assess the information provided give creditors the opportunity for creditors to make representations.
In the request for an extension, Charles Russell said it needed additional time to canvass creditors’ views and would only once it had done so decide whether it wished to further pursue Chapter 11 protection. The Office of the United States Trustee indicated that it had no objection to Charles Russell request for an extension of the deadline.
Awal initially applied last month for Chapter 11 protection saying that it would help the bank recover “avoidable” transfers out of its estate prior to the bankruptcy. The Chapter 11 filing came little more than a year after Awal had filed for Chapter 15 bankruptcy in the same court. Chapter 15 bankruptcy seeks to protect companies from U.S. litigation while they reorganize in a non-U.S. court.
Defaults on loans last year by Awal Bank as well as Saudi conglomerate, Ahmad Hamad Al-Gosaibi & Brothers Co. set off a bitter legal battle on three continents between the two groups that are related by al Sanea’s marriage to a daughter of the Al-Ghosaibi family. Al-Gosaibi has accused Al-Sanea in court filings on three continents of siphoning off $10 billion from his in-laws.
Al-Gosaibi is seeking to recover $9.2 billion in lawsuits in the Cayman Islands against al-Sanea and Awal subsidiaries. The lawsuits were stayed after al-Sanea challenged the Cayman court’s jurisdiction, and an appeal of that decision is set to be heard in November. In July, New York State Supreme Judge Hon. Richard B. Lowe dismissed a lawsuit Al-Gosaibi had filed against Awal and al- Sanea, on grounds of that court being an improper forum. Court proceedings involving Awal are also ongoing in Bahrain, Kuwait, Saudi Arabia, Switzerland and Britain.
Awal’s original Chapter 11 court filing suggested that it would it file a reorganization plan or opt for liquidation in Bahrain rather than the United States. Even though the court papers kept reorganization on the table, the Chapter 11 filing suggests that liquidation is the more likely option. According to its court filing, Awal has assets valued at most at $100 million and liabilities of more than $1 billion. Under Bahrain law, the administrator has until the summer of next year to decide whether to liquidate Awal or return it to its owners.
Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal is beyond salvation and should be liquidated. In its filing, Awal asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.
The request follows rejection last week by the New York court of Awal Bank’s initial application for limited Chapter 11 because the troubled bank was asking to be allowed to keep information confidential and to be exempted from the need to create a U.S. creditors committee. At the same time, U.S. Bankruptcy Judge Allan Gropper kept the door open for Awal to repetition the court provided it the bank agreed to establish such a committee. Gropper said he would allow more time to assess the information provided give creditors the opportunity for creditors to make representations.
In the request for an extension, Charles Russell said it needed additional time to canvass creditors’ views and would only once it had done so decide whether it wished to further pursue Chapter 11 protection. The Office of the United States Trustee indicated that it had no objection to Charles Russell request for an extension of the deadline.
Awal initially applied last month for Chapter 11 protection saying that it would help the bank recover “avoidable” transfers out of its estate prior to the bankruptcy. The Chapter 11 filing came little more than a year after Awal had filed for Chapter 15 bankruptcy in the same court. Chapter 15 bankruptcy seeks to protect companies from U.S. litigation while they reorganize in a non-U.S. court.
Defaults on loans last year by Awal Bank as well as Saudi conglomerate, Ahmad Hamad Al-Gosaibi & Brothers Co. set off a bitter legal battle on three continents between the two groups that are related by al Sanea’s marriage to a daughter of the Al-Ghosaibi family. Al-Gosaibi has accused Al-Sanea in court filings on three continents of siphoning off $10 billion from his in-laws.
Al-Gosaibi is seeking to recover $9.2 billion in lawsuits in the Cayman Islands against al-Sanea and Awal subsidiaries. The lawsuits were stayed after al-Sanea challenged the Cayman court’s jurisdiction, and an appeal of that decision is set to be heard in November. In July, New York State Supreme Judge Hon. Richard B. Lowe dismissed a lawsuit Al-Gosaibi had filed against Awal and al- Sanea, on grounds of that court being an improper forum. Court proceedings involving Awal are also ongoing in Bahrain, Kuwait, Saudi Arabia, Switzerland and Britain.
Awal’s original Chapter 11 court filing suggested that it would it file a reorganization plan or opt for liquidation in Bahrain rather than the United States. Even though the court papers kept reorganization on the table, the Chapter 11 filing suggests that liquidation is the more likely option. According to its court filing, Awal has assets valued at most at $100 million and liabilities of more than $1 billion. Under Bahrain law, the administrator has until the summer of next year to decide whether to liquidate Awal or return it to its owners.
Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal is beyond salvation and should be liquidated. In its filing, Awal asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.
Saturday, October 30, 2010
New York Court Rejects Awal Bank Petition for Chapter 11 Bankruptcy
A New York bankruptcy court has rejected a petition for limited Chapter 11 bankruptcy protection by Bahrain-based Awal Bank, a subsidiary of Saudi Arabia’s embattled Saad Group owned by Saudi billionaire Maan al-Sanea. The court’s decision offers temporary relief to creditors who stood to be left high and dry if the court had ruled in favor of Awal’s request, which would have allowed the troubled bank to keep information confidential and would have exempted it from creating a U.S. creditors committee
U.S. Bankruptcy Judge Allan Gropper however kept the door open for Awal to repetition the court provided it the bank agreed to establish such a committee. Groper told David Molton of Brown Rudnick LLP, the lawyers for Awal’s Bahrain Central Bank appointed administrator, Charles Russel LLP, that the committee was needed as a watchdog because US courts do not appoint administrators.
Groper suggested the request be resubmitted by Nov. 1, the deadline for the U.S. Trustee, which oversees U.S. bankruptcies, to seek candidates for a creditors committee. Alisdair Haythornthwaite of Bell Pottinger Middle East (UAE), speaking on behalf of Charles Russel said the administrator intended to follow the judge’s advice and reapply for Chapter 11 protection. Awal had argued that a U.S. creditors committee would duplicate proceedings in the Cayman Islands and the Middle East involving the bank’s largest creditors.
Awal Bank’s request for Chapter 11 came little more than a year after it had filed for Chapter 15 bankruptcy in the same court. Chapter 15 bankruptcy seeks to protect companies from U.S. litigation while they reorganize in a non-U.S. court. Molton told the court that Awal Bank needed Chapter 11 protection to help it recover what it called “avoidable” transfers out of the estate prior to bankruptcy.
Defaults on loans last year by Awal Bank as well as Saudi conglomerate, Ahmad Hamad Al-Gosaibi & Brothers Co. set off a bitter legal battle on three continents between the two groups that are related by al Sanea’s marriage to a daughter of the Ghosaibi family. Gosaibi has accused Al-Sanea in court filings on three continents of siphoning off $10 billion from his in-laws.
Awal’s Chapter 11 court filing suggested that it would it file a reorganization plan or opt for liquidation in Bahrain rather than the United States. Even though the court papers kept reorganization on the table, the Chapter 11 filing suggests that liquidation is the more likely option. According to its court filing, Awal has assets valued at most at $100 million and liabilities of more than $1 billion. Under Bahrain law, the administrator has until the summer of next year to decide whether to liquidate Awal or return it to its owners.
Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal is beyond salvation and should be liquidated. In its filing, Awal asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.
Al-Gosaibi is seeking to recover $9.2 billion in lawsuits in the Cayman Islands against al-Sanea and Awal subsidiaries. The lawsuits were stayed after al-Sanea challenged the Cayman court’s jurisdiction, and an appeal of that decision is set to be heard in November. In July, New York State Supreme Judge Hon. Richard B. Lowe dismissed a lawsuit Al-Gosaibi had filed against Awal and al- Sanea, on grounds of that court being an improper forum. Court proceedings involving Awal are also ongoing in Bahrain, Kuwait, Saudi Arabia, Switzerland and Britain.
U.S. Bankruptcy Judge Allan Gropper however kept the door open for Awal to repetition the court provided it the bank agreed to establish such a committee. Groper told David Molton of Brown Rudnick LLP, the lawyers for Awal’s Bahrain Central Bank appointed administrator, Charles Russel LLP, that the committee was needed as a watchdog because US courts do not appoint administrators.
Groper suggested the request be resubmitted by Nov. 1, the deadline for the U.S. Trustee, which oversees U.S. bankruptcies, to seek candidates for a creditors committee. Alisdair Haythornthwaite of Bell Pottinger Middle East (UAE), speaking on behalf of Charles Russel said the administrator intended to follow the judge’s advice and reapply for Chapter 11 protection. Awal had argued that a U.S. creditors committee would duplicate proceedings in the Cayman Islands and the Middle East involving the bank’s largest creditors.
Awal Bank’s request for Chapter 11 came little more than a year after it had filed for Chapter 15 bankruptcy in the same court. Chapter 15 bankruptcy seeks to protect companies from U.S. litigation while they reorganize in a non-U.S. court. Molton told the court that Awal Bank needed Chapter 11 protection to help it recover what it called “avoidable” transfers out of the estate prior to bankruptcy.
Defaults on loans last year by Awal Bank as well as Saudi conglomerate, Ahmad Hamad Al-Gosaibi & Brothers Co. set off a bitter legal battle on three continents between the two groups that are related by al Sanea’s marriage to a daughter of the Ghosaibi family. Gosaibi has accused Al-Sanea in court filings on three continents of siphoning off $10 billion from his in-laws.
Awal’s Chapter 11 court filing suggested that it would it file a reorganization plan or opt for liquidation in Bahrain rather than the United States. Even though the court papers kept reorganization on the table, the Chapter 11 filing suggests that liquidation is the more likely option. According to its court filing, Awal has assets valued at most at $100 million and liabilities of more than $1 billion. Under Bahrain law, the administrator has until the summer of next year to decide whether to liquidate Awal or return it to its owners.
Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal is beyond salvation and should be liquidated. In its filing, Awal asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.
Al-Gosaibi is seeking to recover $9.2 billion in lawsuits in the Cayman Islands against al-Sanea and Awal subsidiaries. The lawsuits were stayed after al-Sanea challenged the Cayman court’s jurisdiction, and an appeal of that decision is set to be heard in November. In July, New York State Supreme Judge Hon. Richard B. Lowe dismissed a lawsuit Al-Gosaibi had filed against Awal and al- Sanea, on grounds of that court being an improper forum. Court proceedings involving Awal are also ongoing in Bahrain, Kuwait, Saudi Arabia, Switzerland and Britain.
Friday, October 22, 2010
Saad-owned Bahrain Bank Files for Bankruptcy
In a move that is likely to leave creditors high and dry, Awal Bank BSC, a Bahrain-based subsidiary of Saudi Arabia’s embattled Saad group, has filed for Chapter 11 bankruptcy in a New York bankruptcy court. The filing comes little more than a year after the bank sought US court protection from US creditors and is in line with recommendations made in a report by Ernst & Young.
According to its court filing, Awal Bank has assets valued at most at $100 million and liabilities of more than $1 billion. Bahrain’s central bank last summer appointed an administrator for Awal Bank, owned by Saudi billionaire Maan al-Sanea, after it had defaulted on loans in a sequence of defaults that has sparked a bitter legal battle across continents between Al Sanea’s Saad Group and Saudi conglomerate Ahmad Hamad Al-Gosaibi & Brothers Co. Under Bahrain law, the Bahrain central Bank-appointed administrator has until the summer of next year to decide whether to liquidate Awal bank or return it to its owners.
Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal Bank is beyond salvation and should be liquidated. In its filing, Awal Bank asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.
According to its court filing, Awal Bank has assets valued at most at $100 million and liabilities of more than $1 billion. Bahrain’s central bank last summer appointed an administrator for Awal Bank, owned by Saudi billionaire Maan al-Sanea, after it had defaulted on loans in a sequence of defaults that has sparked a bitter legal battle across continents between Al Sanea’s Saad Group and Saudi conglomerate Ahmad Hamad Al-Gosaibi & Brothers Co. Under Bahrain law, the Bahrain central Bank-appointed administrator has until the summer of next year to decide whether to liquidate Awal bank or return it to its owners.
Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal Bank is beyond salvation and should be liquidated. In its filing, Awal Bank asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.
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