Awal Bank Withdraws Its Request To Withhold Financial Details

Bahrain's Awal Bank BSC is withdrawing its request to withhold financial details and now plans to comply with Chapter 11 disclosure requirements, Dow Jones Daily Bankruptcy Review reported. Awal's U.K.-based administrator had previously asked the U.S. Bankruptcy Court in Manhattan for permission to follow the protocol of reorganizations in Bahrain, allowing the company to withhold information typically made public in U.S. cases, such as the exact amounts owed to the 20 largest creditors. Bahraini authorities placed Awal into administration in July 2009. The bank filed for Chapter 11 protection in the U.S. two months ago. The administrator has determined that Awal "will file its schedules and statement of financial affairs, seek court approval of the retention of the debtor's professionals...and seek court approval of the compensation" for those professionals, Awal attorneys said in court papers filed Monday. The move comes days after a unit of HSBC Holdings PLC, an Awal creditor, protested the Bahraini bank's proposed protocol for running its Chapter 11 case. HSBC Bank USA said Awal is seeking to cherry-pick the powers of the U.S. Bankruptcy Code it would like to use while ignoring other aspects of the law, including disclosure requirements. In the papers filed Monday, Awal did not release a detailed accounting of its assets and debts, but instead separately sought court permission for an extension to file such information. A hearing on the matter is scheduled for Dec. 21. Previously, Awal's administrator, London law firm Charles Russell LLP, said exposing certain financial records could be detrimental to the creditors. The administrator said creditors' claims are treated as "highly confidential" in Bahrain and those parties have already filed their claims in foreign cases with the expectation that they will kept out of public view. In the U.S., a company typically names its largest creditors and the amounts they are owed on its initial bankruptcy petition. Awal listed major financial institutions, including J.P. Morgan Chase & Co. and Abu Dhabi Commercial Bank, among its 20 largest unsecured creditors on its Chapter 11 filing, but didn't specify amounts owed to each. Awal filed for Chapter 11 in October for the limited purpose of attempting to wrest back payments made to its creditors in the U.S. That filing came more than a year after the bank sought protection under Chapter 15, the section of U.S. law governing foreign bankruptcies, to gain recognition of its foreign insolvency proceeding in U.S. courts.