BCCI Creditors Fail to Block Repayment Plan
LONDON (AP) _ A group of BCCI’s creditors failed to convince a British appeals court Friday to block a plan that would give them about a third of their money back.
After a four-day hearing, the Court of Appeal refused to overturn a High Court approval of a plan to repay creditors and depositors of Bank of Credit and Commerce International between 30 percent to 40 percent of their money.
The appeals court denied a request by the BCCI U.K. Creditors’ Committee to appeal to the House of Lords, the unelected upper chamber of Britain’s parliament.
It ordered the group to pay their own costs and those of BCCI’s bank- appointed liquidators, the accounting firm Touche Ross and Co. The liquidators crafted the repayment plan late last year after extensive negotiations with BCCI’s majority shareholders, the government and ruling family of Abu Dhabi.
Lord Justice Dillon said there was no doubt that the terms of the deal ″represent the best the liquidators have been able to achieve after protracted and difficult negotiations with the majority shareholders.″
The plan is opposed by a 7-1 vote of the BCCI U.K. Creditors’ Committee. The group had argued that the High Court had no power to approve the deal in the face of such strong creditor opposition.
Under the restitution plan, the Abu Dhabi government has offered to repay an estimated 250,000 depositors of BCCI in 40 countries the equivalent of 30 percent to 40 percent of their deposits. In return, the depositors will pledge not to sue the Abu Dhabi government.
Dr. Adil Elias, chairman of the BCCI Depositors’ Protection Association and leader of the appealing group, said court’s rejection was ″not fair. We are fighting for all the creditors and my message to Abu Dhabi is that we are not going to go away.″
″It is now clear to us that the liquidators are no longer working for the benefit of BCCI depositors,″ Elias said.
Lawmaker Keith Vaz, who has campaigned for a better deal for BCCI staff and customers, called the Appeal Court’s decision ″a body blow to the creditors’ campaign for justice.″
High Court Judge Donald Nicholls, in his ruling last month, called the repayment plan ″the best option″ and urged creditors to accept the deal. The deal has been approved by a court in the Cayman Islands, seat of BCCI (Overseas) Ltd., one of the BCCI holding company’s two main units.
It has yet to be approved in Luxembourg, where the second unit, BCCI SA, is registered. Creditors there also have rejected the Abu Dhabi deal.
International bank regulators seized BCCI on July 5 following auditors’ reports of long-term, widespread fraud. Losses are estimated in the billions. The bank last December pleaded guilty to racketeering charges in the U.S. and agreed to forfeit $550 million.