Friday, October 22, 2010

Awal Bank FIles for Chapter 11 Bankruptcy in US

In terms of recovery all venues are likely to be highly inconvenient.

UpdateSee subsequent post.

According to news reports on Bloomberg, on 21 October Awal Bank filed for Chapter 11 bankruptcy in the Southern District Court of Manhattan listing assets of between US$50 million to US$100 million and liabilities of  more than US$1 billion. 

That would not seem to augur well for creditors.  Though it should come as no surprise. 

Earlier Awal had filed under Chapter 15 of the US Bankruptcy Code.  That Chapter is used when a company asserts its proceedings are taking place under a foreign jurisdictions laws and procedures broadly equivalent (in fairness) to US procedures.   It will be interesting to see what arguments were advanced for moving the proceedings to the USA.  Forum non conveniens?

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