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The news reports of TID's "achieving a deal" with less than 100% creditor agreement strike me as a bit optimistic.
Except for the DIFC law, I don't believe there is a cramdown feature in any other bankruptcy law in the Gulf. If this is the case, then the non signing creditors have the right to continue to pursue their repayment through the courts potentially upending the restructuring agreement.
What am I missing?
I do recognize that one strategy might be to just go forward as though one had agreement -- as was done with Redec long ago I am told. But that was not a legally effective cramdown. And always at risk from a legal challenge.
This is particularly an issue here because a sizeable portion of the reluctant creditors hold their debt under Islamic structures which appear to have a legal preference over other extensions of conventional loans.
The news reports of TID's "achieving a deal" with less than 100% creditor agreement strike me as a bit optimistic.
ReplyDeleteExcept for the DIFC law, I don't believe there is a cramdown feature in any other bankruptcy law in the Gulf. If this is the case, then the non signing creditors have the right to continue to pursue their repayment through the courts potentially upending the restructuring agreement.
What am I missing?
I do recognize that one strategy might be to just go forward as though one had agreement -- as was done with Redec long ago I am told. But that was not a legally effective cramdown. And always at risk from a legal challenge.
This is particularly an issue here because a sizeable portion of the reluctant creditors hold their debt under Islamic structures which appear to have a legal preference over other extensions of conventional loans.