Lawyers working for the Al Gosaibi family of Saudi Arabia claim to have identified some US$1 billion in assets in the Cayman Islands in companies formerly owned by their long-term adversary, Maan Al Sanea.
Al Gosaibi lawyers on $1bn hunt
Lawyers working for the Al Gosaibi family of Saudi Arabia claim to have identified some US$1 billion (Dh3.67bn) in assets in the Cayman Islands in companies formerly owned by their long-term adversary, Maan Al Sanea.
A recent judgement by the Cayman's chief justice, Anthony Smellie, allowed the Al Gosaibis to try to locate those assets, which they believe were stolen from them by Mr Al Sanea in the run-up to the 2009 financial crisis.
Mr Al Sanea has consistently denied those allegations.
Many of the assets of Mr Al Sanea and his main Saudi company, the Saad Group, were held in the offshore jurisdiction of the Cayman Islands and much of the subsequent legal battle between him and the Al Gosaibis has been concentrated there.
"The companies in the Cayman Islands were instrumental to his multi-billion dollar global fraud, and their coffers remain filled with funds that we intend to recover," said Eric Lewis, the New York lawyer leading the global legal battle against Mr Al Sanea.
"The Cayman companies, which are in liquidation, include Saad Investment Company Limited (SICL), Singularis Holdings, and several other investment companies controlled by the Saad Group, and are holding around $1bn for eventual distribution to their creditors," based on court filings, he added.
Mr Al Sanea has consistently denied accusations of fraud, theft and forgery of more than $9bn from the Al Gosaibis. A spokesman declined to comment on the Cayman ruling.
However, the issue of assets in the Cayman Islands is complicated by the multiplicity of claimants there.
In addition to the Al Gosaibis, the accounting firm Grant Thornton, acting as liquidators on behalf of the main financial creditors, and two other firms are also claiming entitlement to all or some of the assets there. The court has yet to rule on which of the parties has a "proprietary claim" on any remaining assets.
"Matters in Cayman are now about one set of creditors versus another, and the lawyers and accountants are getting very, very rich from keeping the case going," said one lawyer close to the proceedings, speaking anonymously.
The same lawyer estimated legal and other advisers had been paid nearly $100m in the legal actions in the Cayman Islands.
If the Al Gosaibis proceed with the asset tracing and discovery, it could take another year before the case reaches the stage of a formal trial, involving another big round of payouts for professional services.
There is also dispute as to what value assets there might have. When Grant Thornton first reviewed the assets in 2009 they found cash, equities, bonds and other financial instruments to the value of $6.2bn.
However, liabilities in the Cayman companies reduced this value to a net $2.21bn. Grant Thornton said then there was "material uncertainty" as to the amount the assets might fetch in a disposal programme.
There has been no published estimate since then of the value but a legal source said Grant Thornton privately told creditors the value of assets in the biggest company, SICL, stood at $320m as of last autumn.
Al Gosaibi lawyers nonetheless regarded the Cayman ruling as another positive step, following a default judgement against Mr Al Sanea that also resulted in them being awarded $2.5bn.
In the most recent judgement, however, the Cayman court dismissed the Al Gosaibi case against one "special purpose vehicle", called SIFCO5, formerly owned by Mr Al Sanea.
That means SIFCO5's assets - estimated at $170m - can now be liquidated and paid out to creditors.
Mr Smellie ruled Al Gosaibi can continue to take action against Cayman companies associated with the collapsed Bahraini bank Awal.
In a separate legal development, a New York court has ruled that a $25m judgement arising from the Al Gosaibi affair in Bahrain and awarded to one of the biggest international creditors, Standard Chartered, could be enforced in US courts.
A lawyer called the ruling "a significant development for international litigant and practitioners …[and] recognises New York's status as a friendly jurisdiction for parties seeking to use foreign arbitral awards or money judgements to collect assets in the US."
The award had originally been made by the Bahrain Chamber for Dispute Resolution, an arbitration court in the kingdom.
Despite the spate of legal actions in different parts of the world, observers of the long-running feud between Mr Al Sanea and the Al Gosaibis believe the most serious effects of the confrontation are still being felt in Saudi Arabia.
Both protagonists are still subject to asset freezes in the kingdom and have had their rights to travel curtailed for nearly three years.
Saudi banks are still owed several billion dollars.
While Mr Al Sanea is said to have done a deal with Saudi creditors - although no details were ever made public - early on in the affair, the Al Gosaibis have still made little progress in on-off negotiations with Saudi creditors.
Talks are currently stalled over the valuation of assets the family has put up as repayment for defaulted loans.
Most Al Gosaibi assets - whether in operating businesses, land or shareholdings - have been either "pledged" to creditors or marked as "restricted" by the government, meaning they cannot be sold without official approval.
A committee of policymakers, bankers and officials, known as the "King's Committee", has told the two sides to reach their own deal, with each other and with creditors but so far that has proved impossible. Indeed, some observers are not ruling out the possibility of a fresh round of legal action in Saudi Arabia.
Most of the big international creditors among the 100-plus group of banks owed money by the Al Gosaibis or Mr Al Sanea have already written off their debts. But that does not mean they will not take any action in the event the debtors fail to engage in meaningful negotiations.
"I sense the two families are getting on with their [separate] lives and the only big remaining issue for them is the mutual freezing orders in Saudi Arabia," says one observer of the near five-year saga.
"But even that has just become an excuse not to speak to the non-KSA creditors."