Luxembourg Court Clears Way for Repayment for BCCI Creditors
ELIZABETH D. WISE
Jan. 31, 1995
LUXEMBOURG (AP) _ After waiting more than three years, creditors of the failed Bank of Credit and Commerce International may get some money this summer.
A Luxembourg court cleared the way Tuesday for recovery of about 15 cents on the dollar by approving a revised settlement plan.
Under the plan, the bank's majority shareholders _ the government and ruling family of Abu Dhabi _ must pay $1.8 billion toward a global settlement fund. Abu Dhabi is part of the United Arab Emirates.
The plan was worked out between liquidators and the emirate.
Banking regulators closed BCCI branches around the world in July 1991, leaving claims of about $10 billion.
Officials alleged BCCI was used to launder money for international drug traffickers, but some depositors who lost money blamed lax regulation by authorities.
Barring an appeal of the court-approved plan, depositors could get back about 15 cents on every dollar lost, Luxembourg liquidator Georges Baden said.
Under the plan, Abu Dhabi would turn over $1.55 billion right away and pay the rest within three years, Baden said. That might permit payments to begin in the summer, he said.
Creditors may appeal Tuesday's ruling by a three-judge panel in Luxembourg.
But the plan has won approval from a creditors' committee and courts in London and the Cayman Islands, sites of other BCCI headquarters.