Bank of Credit and Commerce International: Insolvency

Business, Enterprise and Regulatory Reform written question – answered on 16th January 2008.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

To ask the Secretary of State for Business, Enterprise and Regulatory Reform when the administration and liquidation of the Bank of Credit and Commerce International began; what fees were collected by insolvency practitioners and their advisers in relation to the Bank; and when the liquidation was finalised.

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

The UK operation of BCCI was placed into provisional liquidation on 5 July 1991. At about the same time BCCI operations in Luxembourg (its place of registration) and in the Cayman Islands were also put into provisional liquidation. On 14 January 1992, attempts at rescue having failed, the High Court ordered that BCCI be wound up and similar orders were made in the other jurisdictions at about that time.

The most recent date at which the costs of the liquidation are available is 15 January 2007, from the annual report to the Secretary of State. The English liquidators' remuneration totalled US $337 million paid and legal fees incurred by the English liquidators totalled US $225 million. In addition to those legal fees are the amounts which have been paid to the Bank of England following the abandonment of the liquidators' action in 2006, which totalled some £85 million, including VAT and interest. It is noteworthy that despite the high costs total moneys received by the UK liquidators as at 15 January 2007 amounted to just over US $4.1 billion and there had been five dividends to creditors who had by then received 81 per cent. of their debts. The liquidators paid a further dividend of 3 per cent. on 27 November 2007 and expect to make a further payment but are unable to provide detail at present.

The liquidation is not yet finalized. The liquidators are making every effort to conclude the liquidation and pay final amounts to creditors as soon as possible, however, the English liquidation is one of several worldwide that are closely linked and only when they are all substantially complete will it be possible for a formal conclusion in this country.

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