BCCI creditors guaranteed pounds 1.8bn in new offer
Friday 11 March 1994
A previous offer, rejected by the Luxembourg courts after objections from a small group of creditors, was worth about dollars 1.7bn. But that offer could have varied between dollars 1.2bn and dollars 2.2bn depending on the amount of money recovered in future legal actions.
Abu Dhabi has agreed to pay the dollars 1.8bn if only half the creditors, or those with claims totalling dollars 4.5bn, waive their right to take legal action over the collapse of the bank in 1991.
Under the new arrangements agreed with the liquidator of BCCI, Touche Ross, but yet to be approved by creditors and the courts, there will be a staged payment of dollars 450m. This represents payment in advance for expected proceeds of actions mounted to recover money from the auditors, Price Waterhouse and Ernst & Young, and the Bank of England.
Abu Dhabi is dropping plans to sue the auditors jointly with Touche although it may take action separately. It has also agreed to pay dollars 450m of the recoveries money as soon as the deal is agreed, dollars 150m after two years and dollars 100m a year later. It will also waive claims for dollars 2bn against BCCI.
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