New Saudi bankruptcy law may resolve $22 billion Saad debt saga

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Vehicles belonging to billionaire Maan al-Sanea and his company are auctioned off by Saudi authorities in Dammam, Saudi Arabia, on March 18, 2018. (REUTERS/Zuhair Al-Traifi/File Photo)
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Maan Al-Sanea
Updated 10 March 2019

New Saudi bankruptcy law may resolve $22 billion Saad debt saga

  • Saad Group, with interests from banking to health care, defaulted in 2009, leaving banks with unpaid debts of about $22 billion
  • Saudi Arabia’s bankruptcy law is part of the Saudi government’s efforts to make the economy more attractive to investors

ALKHOBAR, Saudi Arabia: A Saudi court has approved an application by billionaire Maan Al-Sanea and his company, Saad, to have their case resolved through the Kingdom’s new bankruptcy law.

The ruling could provide a resolution to one of Saudi Arabia’s longest-running debt sagas.

Saad, with interests from banking to health care, defaulted together with another conglomerate, Ahmad Hamad Al-Gosaibi and Brothers, in 2009, leaving banks with unpaid debts of about $22 billion.

Creditors have spent the past 10 years pursuing Saad, which is based in Alkhobar, for claims estimated at between $11 billion and $16 billion.

“This is a landmark step for all stakeholders since 2009,” said Ahmed Ismail, chief executive of Reemas Consultants, which was appointed as Saad’s financial adviser in late 2017 to find a settlement with creditors.

“The regional and international creditors represent more than 85 percent of total debt, some of whom advised filing under the new bankruptcy law. Given that it is more or less aligned with regional and international commercial law practices, the probability of its success is much higher.”

The commercial court in Dammam last month approved an application for financial reorganisation under the terms of the Saudi bankruptcy law and appointed an independent trustee to oversee the process. 

The trustee, Saleh Al-Naim, sent a notice to creditors announcing the beginning of the financial reorganisation proceedings, and asked them to submit their claims within 90 days.

Saad’s filing is among the first to be accepted under Saudi Arabia’s bankruptcy law, which came into effect last August and is part of the Saudi government’s efforts to make the economy more attractive to investors.

Until last year the main options for debt defaults were liquidation or cash injections. The law provides more options and regulates procedures such as settlements and liquidation.


US court orders Iran to pay $879 million to 1996 Khobar bombing survivors

Updated 57 min 48 sec ago

US court orders Iran to pay $879 million to 1996 Khobar bombing survivors

  • The court ruled that the Iranian government directed and provided material for the attack
  • The Khobar Towers in Saudi Arabia were housing US forces when it was bombed in 1996

DUBAI: A United States federal court held Iran responsible for the 1996 bombing of the Khobar Towers in Saudi Arabia where US forces were housed, and ordered Tehran to pay $879 million to survivors. 

The Khobar Towers was a housing complex in the eastern city of Khobar, near the Abdulaziz Air Base and Saudi Aramco’s headquarters in Dhahran, that housed American servicemen working on Operation Southern Watch.

A truck bomb was detonated on June 25, 1996, near an eight-story building of the housing complex, which killed 19 US Air Force personnel and a Saudi national and wounded 498 others.

The court ruled that the Iranian government directed and provided material support to Hezbollah who detonated the 5,000-pound truck bomb, a Chicago law firm press release said. The attackers reportedly smuggled the explosives used in the attack from Lebanon. 


The lawsuit was brought under the terrorism exception of the US Foreign Sovereign Immunities Act by the 14 injured US airmen and 21 of their immediate family members.

The defendants in the case were listed as the Islamic Republic of Iran, the Iranian Islamic Revolutionary Guards Corps and the Iranian Ministry of Intelligence and Security.

 

 

“We will continue to seek to hold the Government of Iran accountable for this terrorist attack as long as is necessary,” said Adora Sauer, the lead attorney of MM LAW LLC.

US District Judge Beryl A. Howell found the defendants liable and awarded the plaintiffs $132 million for pain and suffering, as well as prejudgment interest, for a total compensatory damage award of $747 million and $132 million for punitive damages.


The court also said the plaintiffs are eligible for partial payments from the US Victims of State Sponsored Terrorism Fund, which compensates American victims of acts of international terrorism with funds obtained from fines and forfeitures levied against companies caught illegally laundering money for sanctioned countries and persons. 

The attorneys also intend to pursue enforcement of the judgments through litigation intended to seize Iranian assets.

“The physical and psychological toll on our families has been extremely high, but this judgment is welcome news. More than 20 years on, we want the world to remember the evil that Iran did at the Khobar Towers. Through the work of our attorneys, we intend to do just that,” said Glenn Christie, a retired Air Force staff sergeant crew chief who was severely injured in the bombing.


“The massive explosion took so much from their minds and bodies on the day of the attack in 1996 and every day and night since then. They can now live with that balance justice provides,” according to John Urquhart of the Urquhart Law Firm, who also represents the bombing victims.