Creditors of the closed Bank of Credit & Commerce International (BCCI) can expect several more months delay before receiving compensation payments following the announcement that an appeal against a $1,800 million settlement will be held in the autumn. Luxembourg appeals court judge Marc Thill said hearings would begin on 20 October (MEED 12:5:95).
Tony Scott of the BCCI creditors committee says the appeal hearing is likely to last a matter of days, but the court could take weeks to arrive at a decision, pushing compensation payments back to the beginning of 1996. ‘The reason we went for the settlement with Abu Dhabi wasn’t because we thought it enough, but because it was better to go with the money on offer than wait any longer,’ says Scott. ‘This delay is a further frustration.’
Some 250,000 creditors have been waiting for almost 4 years for compensation. The settlement offered by BCCI’s main shareholder, the government of Abu Dhabi, was approved by the Luxembourg courts at the end of January this year. The UK High Court and the Cayman Islands’ Grand Court approved the deal at the end of last year (MEED 10:2:95).
However, four former employees of the bank lodged their appeal on 28 April on the grounds that the deal is contrary to Luxembourg public order, violates the principle of equality and is economically unacceptable. On 19 May, another Luxembourg court was to announce a decision on a separate settlement worth $245 million between the liquidators of BCCI and National Commercial Bank of Saudi Arabia.