Bahrain's The International Banking Corp is in Chapter 15 bankruptcy in the US
The International Banking Corp's Bahrain-based bankruptcy lawyers can't void US rulings in lawsuits brought by Deutsche Bank and Mashreqbank and force the turnover of about $29m, a judge ruled.
TIBC, a provider of commercial loans winding down in Bahraini courts, is in Chapter 15 bankruptcy in the US, which foreign companies use to protect US assets while they are liquidated or reorganised in a foreign court.
US Bankruptcy Judge Stuart Bernstein, who is overseeing TIBC’s Chapter 15 case, today denied a motion by an administrator to the foreign bankruptcy to vacate attachment orders obtained by Deutsche Bank and Mashreqbank, saying a Bahraini court should decide the issue.
“This puts the cart before the horse” because it isn’t clear whether the attachment orders are voidable under Bahraini law, Bernstein wrote.
Deutsche Bank, based in Frankfurt, has a claim for $69.8 million and Dubai-based Mashreqbank has a claim for $69.1m. Both filed lawsuits in New York Supreme Court seeking to recover amounts from foreign-exchange transactions.
Bernstein said “it appears” a liquidation will follow TIBC’s current period of administration, which has a two-year time limit.
TIBC invested in fixed-income securities, investment-grade equities, hedge funds and structured products, according to its website. It also develops finance products, such as sukuks, for Islamic banks.
The company had assets of $4bn and liabilities of $2.6bn as of July 31, according to its Chapter 15 petition.
The case is In re The International Banking Corp., 09-17318, U.S. Bankruptcy Court, Southern District of New York (Manhattan).