Receiver for BCCI Seeks Global Freeze on Assets
The court-appointed receiver for BCCI Holdings will seek this week to block liquidation of the bank company's assets in individual countries until a comprehensive list of creditors is compiled, according to European banking sources.
Brian Smouha, the receiver, will visit regulators in several countries. His mission is to resolve growing confusion over how to deal with worldwide assets of Luxembourg-based Bank of Credit and Commerce International SA.
A Luxembourg judge put BCCI Holdings under court-administered receivership on Aug. 1, clearing up a legal vacuum over control of the $20 billion-asset bank's worldwide holdings. Mr. Smouha is a partner with Touche Ross & Co. in London.
In addition to Mr. Smouha, the court assigned two Luxembourg officials to make decisions concerning the holding company for the bank. They have the power, subject to court approval, to liquidate or restructure the bank.
"The important thing for him is to establish control over all assets of the group and limit initiatives by local courts to assign assets [of the bank] to local creditors," said a senior Bank of England official who declined to be named.
If courts in different countries move separately to liquidate BCCI's assets, the official added, this could give "unfair precedence to local creditors."
Protection from Creditors
Bank of Credit and Commerce International obtained a one-week restraining order on Friday from a federal bankruptcy court in Manhattan, halting liquidation proceedings against the bank's U.S. units.
BCCI said it was seeking to halt liquidation of its U.S. assets, on the grounds that U.S. creditors might gain an unfair advantage and involve the bank in additional litigation.
Mr. Smouha is due to meet with Federal Reserve Board officials to decide how to dispose of a majority stake BCCI secretly acquired in First American Bankshares Inc., the $11 billion-asset bank based in Washington.