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Wednesday, 22 February 2012

MIDEAST MONEY-Legal limbo stymies banks' recovery of Dubai govt debt | Reuters

More than two years after the Dubai debt crisis erupted, the restructuring of corporate debts remains in legal limbo as it is unclear how banks can get back their money from government-linked enterprises in the Gulf state.

The impasse, which is aggravated by deficient bankruptcy legislation, is finally pushing some banks to lose patience and consider legal action. But their tougher stance is being matched by a hardening of the government's attitude to bailing out state-linked entities, raising the risk of further delays in completing these restructurings.

In other jurisdictions, the spectre of legal action would have loomed long before now.