Trowers & Hamlins, the international law firm appointed as external Administrator of The International Banking Corporation B.S.C.(c) (TIBC) by the Central Bank of Bahrain (CBB), has won access to key financial information about the operation of a New York bank account held by Ahmad Hamad Algosaibi & Brothers (AHAB).
The ruling by the United States Bankruptcy Court in New York , under Chapter 15 of the US Bankruptcy Code and pursuant to Bankruptcy Rule 2004, authorising discovery, compels AHAB's New York bankers to hand over information that AHAB has refused to disclose about a key AHAB bank account.
External Administrator Trowers & Hamlins, which is working with leading independent restructuring firm Zolfo Cooper, had been requesting the information since August 2009 and filed the claim in April as part of a wider asset realisation program being implemented on behalf of the Central Bank of Bahrain and in the interests of TIBC's creditors.
Abdullah Mutawi, the Partner at Trowers & Hamlins leading the asset realisation strategy, said it was a significant development.
"This is the first time AHAB has been compelled to reveal details of any of its bank accounts. It is particularly significant because AHAB has repeatedly refused to hand over important information relating to the operation of the account. The account is important because a substantial portion of TIBC's funds were remitted to it and the information should help reveal the ultimate destination of those funds."
"Following on from the official recognition of the TIBC administration by the US Courts, the Administrator has a duty to pursue all avenues to track all monies and assets which have left the possession or control of TIBC and to recover those assets for the benefit of TIBC's creditors. The disclosure application we have won today is a significant step forward in the asset realisation process."
The successful application in the New York Courts follows filings by the Administrator of a US$720 million foreign exchange claim against AHAB at the Saudi Arabian Monetary Agency (SAMA) Committee in the Kingdom of Saudi Arabia last week and the earlier filings with the Negotiable Instruments Committee (NIC) in Saudi Arabia to recover US$235 million in loan defaults by Saad Trading and Abdulaziz Al Sanea.
Trowers & Hamlins and Zolfo Cooper calculate that AHAB is the single biggest debtor of TIBC owing $3.2 billion.
TIBC was placed in administration by the CBB in July 2009. The CBB then appointed Trowers & Hamlins in Bahrain as external Administrator on 10 August, 2009. The bank is a wholesale bank and is majority-owned by AHAB.