Bahrain investment firm Arcapita Bank received approval from a U.S. Bankruptcy Court on Tuesday for its plan to repay creditors, thought to be the first that is compliant with sharia, Islamic law.
"I'm happy to confirm the plan," said Judge Sean Lane of the U.S. Bankruptcy Court in Manhattan. "This has been a fascinating case for me."
Under the plan of reorganization, Arcapita will repay its only secured creditor, Standard Chartered Plc (STAN.L), 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.