BCCI's Liquidation Delayed in Britain

LONDON - Britain's High Court adjourned until Jan. 14 a hearing on a Bank of England petition to liquidate Bank of Credit and Commerce International.

BCCI's provisional liquidators, the accounting firm Touche Ross, asked for the delay to synchronize claims in Britain, Luxembourg, and the Cayman Islands, where the defunct bank had its main operations.

The extra time would also allow Brian Smouha, a Touche Ross partner, to complete delicate talks with BCCI's Abu Dhabi owners on a worldwide compensation plan.

Balance Sheet Given

A report from the provisional liquidators, read in court, said BCCI had estimated assets of $1.16 billion and liabilities of $10.64 billion at the end of June 1991. The bank group had total loans of about $9 billion, the report said.

The Touche Ross motion to adjourn the hearing was not opposed by the Bank of England and other interested parties represented in court, including depositors and former staff.

Touche Ross lawyer Michael Crystal said the liquidation plan, also called the "Luxembourg Plan," will be put before the Luxembourg courts for approval on Jan. 3.

BCCI Holdings, parents of the two banking arms, BCCISA and BCCI (Overseas) Ltd., is registered in Luxembourg, as is BCCI SA. BCCI (Overseas) is based in the Cayman Islands.

The group's main operating center was in London. BCCI was closed July 5 as part of a worldwide sweep by regulators investigating what has been called the biggest banking fraud in financial history.

The shareholders, including Sheikh Zayid bin Sultan, the ruler of Abu Dhabi, and Abu Dhabi state financial institutions, described the Bank of England's action as "precipitate."

In a statement Monday, those shareholders charged that if a restructuring that had been approved by the Bank of England was allowed to proceed, "no depositors' money would have been lost." The plan was abandoned when BCCI was seized.

The Abu Dhabi group, which said it welcomed the High Court's adjournment decision, said it was pursuing a settlement to enhance benefits for depositors and creditors.

If the courts, creditors, and the Abu Dhabi shareholders agree to the Luxembourg Plan, which would pool worldwide assets of BCCI for payment, creditors could receive 10% of their total claims as a first payment by late 1992, Mr. Smouha said after the court hearing. He said he hoped 30% to 40% would be possible in the longer term.

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