BCCI creditors move closer to compensation

17 November 1995

Creditors of the closed Bank of Credit & Commerce International (BCCI) could receive their first compensation payments in early 1996 after four former BCCI employees offered to drop their appeal against a worldwide settlement plan. The appeal has been a major obstacle in delaying approval by the Luxembourg courts of a $1,800 million settlement.

Once the settlement plan is approved, the bank will enter the final stages of liquidation. Among those to benefit will be Union National Bank (UNB) of the UAE, formerly BCC Emirates and 40 per cent owned by BCCI. The Abu Dhabi government has agreed a plan to change the shareholding structure, which will not be completed until after the liquidation. UNB will then be in a position to publish its first balance sheet since BCCI was closed in 1991.

The Luxembourg court heard the emp- loyees offer to withdraw their appeal on 3 November, and adjourned the case until 16 November. If the settlement is approved, creditors could receive an initial payment of 20 per cent of the amount they lost, which could rise to between 30-40 per cent once the liquidation is completed.

The four appellants have been offered a separate out-of-court settlement which will bring about $70 million to 16,000 former employees.

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