New York, NY- Bahrain-based Arcapita Bank BSC, an Islamic compliant investment, has filed for Chapter 11 bankruptcy in a U.S. court after failing to reach an agreement with creditors.
Arcapita, whose investments include British Freightliner and women’s clothing retailer J. Jill was forced to retain a bankruptcy attorney after they were unable to refinance a $1.1 billion dollar loan coming due on March 28th. The bank said the bankruptcy filing was a way for them to protect their assets while they worked to turnaround its finances.
Arcapita Bank, formerly known as the First Islamic Investment Bank and five affiliates employ over 200 people and listed their assets at $3.03 billion with debts totaling $2.55 billion.
Although Arcapita had the support of some of its investors, they could not reach a satisfactory deal with “nonbank creditors.” This along with the current Eurozone financial crisis made it difficult for the bank to get financing that would help them avoid bankruptcy.
The bank sold of its interest in two American companies, Caribou Coffee and Church’s chicken in order to make debt payments last year.
Arcapita joins a number of Bahrain-based investment banks, which include Awal Bank BSC and Gulf Finance House BSC that have needed the assistance of a bankruptcy lawyer to help them return to solvency.
Any company face with financial difficulties can get the expert advice of a bankruptcy attorney to help them draft a plan that will satisfy their creditors and allow them to return to profitability.
