Islamic Finance Insolvencies under Secular Bankruptcy Laws: A Case Study of Arcapita Bank under US Chapter 11

Najeeb Zada (), Ahcene Lahsasna (), Ziyaad Mahomed () and Muhammad Yusuf Saleem ()
Additional contact information
Najeeb Zada: International Centre for Education in Islamic Finance (INCEIF)
Ahcene Lahsasna: INCEIF
Ziyaad Mahomed: IFISA
Muhammad Yusuf Saleem: INCEIF

Chapter 6 in Islamic Banking, 2017, pp 127-148 from Palgrave Macmillan

Abstract: Abstract Like many other financial institutions, Bahrain-based Arcapita Bank operating in the United States was hit hard by the Eurozone crisis that followed the global financial crisis. Unable to restructure its $1.1 billion debt obligations due in March 2013, the bank decided to file for Chapter 11 protection in the US Bankruptcy Court. This case study introduces Arcapita and its operations, explains the US Chapter 11 and its important aspects like debtor in possession (DIP) financing, highlights the most significant episodes of the Arcapita case, and concludes with important lessons embedded in the proceedings. The case as a precedent as well as Chapter 11 as the basis for a corporate insolvency law in Islamic finance is also discussed.

Keywords: Insolvency; Chapter 11; DIP financing; Shariah compliance (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pcichp:978-3-319-45910-3_6

Ordering information: This item can be ordered from
http://www.palgrave.com/9783319459103

DOI: 10.1007/978-3-319-45910-3_6

Access Statistics for this chapter

More chapters in Palgrave CIBFR Studies in Islamic Finance from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().