Bahrain investment firm Arcapita Bank received approval from a U.S. bankruptcy court yesterday for its plan to repay creditors, thought to be the first that is compliant with sharia, Islamic law, Reuters reported yesterday. Under the plan of reorganization, Arcapita will repay its only secured creditor, Standard Chartered Plc, in full. Arcapita will transfer its assets to a new holding company which will dispose of its investments over time, in an attempt to avoid a firesale liquidation. The company's unsecured creditors will receive the equity in the new holding company as well as their pro rata share in a sharia-compliant loan. General unsecured creditors are expected to receive around 7.7 percent of the $1.9 billion they are owed, according to court documents.
