Algosaibi Groups Signs Settlement Agreement with Claimant Steering Committee
Historic Settlement Agreement
AHAB has long sought a comprehensive settlement with all financial institutions that have claims against it ("Claimants"). In May 2014 the Company initiated a comprehensive settlement process and invited all Claimants – local and foreign – to participate. A five-member Steering Committee was formed to negotiate with AHAB, and the parties agreed detailed settlement terms, which were presented to the wider Claimant group at a meeting on 28 January 2016.
As a further important step in formalizing this deal, AHAB has signed today a settlement support agreement with the five Steering Committee members. This agreement formally commits AHAB and the Steering Committee members to support the implementation of the previously agreed settlement terms.
The next step in the process is for other Claimants to sign the Settlement Support Agreement. To date, AHAB has agreed with other Claimants (representing 89.9% by number and 56.3% by value) the amount of their claims and consented to their enforceability against AHAB as part of the settlement process. Claimants will be asked to sign the Settlement Support Agreement as soon as possible over the coming weeks.
The process for resolving claims against AHAB was accelerated recently with the appointment of a three-judge Joint Directorate of Enforcement at the General Court in Al Khobar, Saudi Arabia ("JDEK"), which is authorized to address claims against AHAB. The JDEK has publicly invited Claimants to submit their claims against AHAB by 21st July. In a further attempt to assist Claimants, AHAB has recently requested an extension of this deadline.
AHAB intends, jointly with Claimants, to request that the JDEK implements and administers the agreed settlement. AHAB remains firmly of the view that the comprehensive settlement that has been agreed is in the best interests of all stakeholders. A lot of effort has gone into negotiating the deal and it is designed to incentivize AHAB to maximize returns to Claimants. It would also result in fair treatment of all claims in accordance with Shariah principles of equality and respect for the will of the majority. In addition, the settlement protects livelihoods of employees, eases administrative burdens and costs to the court and parties, and preserves the economy of the Eastern Province and the reputation of the Kingdom of Saudi Arabia in international markets.
Asked about the development, Stephen Jenkins of Arab Banking Corporation, a member of the Steering Committee, said, "By signing the settlement support agreement with AHAB, the five financial institutions that comprise the Claimant Steering Committee have committed themselves to support the deal on the agreed terms. The Steering Committee remain of the view that this is the best solution to reach a comprehensive agreement that maximizes recoveries for all claimants. We now look to the full claimant group to do the same."
Largest Trial in the History of the Cayman Islands
One of the most important components of the comprehensive settlement is the anticipated upside to Claimants from any recoveries that AHAB receives in the USD 7.3 billion legal case that it brought in the Grand Court of the Cayman Islands. The trial in the case began last week against seventeen (17) offshore shell companies (now in liquidation) that AHAB alleges participated in and benefitted from a massive fraud discovered in 2009. The fraud resulted in losses of billions of dollars to AHAB and more than 100 Claimants.
AHAB initially filed its case in 2009 to prevent those responsible for the fraud from removing assets from the Cayman companies before AHAB could seek damages through the courts – damages that AHAB believes it will recover and that it will then make available for distribution to Claimants as part of the comprehensive settlement.
AHAB remains committed in its efforts to maximize recoveries from litigation and is incentivised to do so by the terms of the comprehensive settlement. AHAB is optimistic and determined that it will prevail in its Cayman Islands case and in defeating the counterclaim brought by one of the liquidators, Grant Thornton. AHAB has consistently and publicly stated that the Cayman claims should be settled in order to speed up the recovery to Claimants.
In discussing the litigation, AHAB's CEO, Simon Charlton, said: "AHAB is seeking to make litigation recoveries that we will then return to Claimants through the comprehensive settlement. This will give Claimants a significantly greater recovery than would otherwise be available to them without a settlement. This has long been AHAB's objective and, while we are pleased with the progress that has been achieved, we will continue working hard on all fronts until it is completed."
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/algosaibi-groups-signs-settlement-agreement-with-claimant-steering-committee-300303040.html
