Saudi Arabian hospitality, food and real estate group Ahmad Hamad Al-Gosaibi & Bros. (Ahab) collapsed in 2009.
As a result, Ahab was unable to repay the $6bn in claims against it.
This lead to eight years of legal and financial actions in the Middle East, London, New York and the Cayman Islands against Maan Al-Sanea, who the family believes engaged in unauthorised borrowing from the company and redirected proceeds to his own companies, mainly based in the Cayman Islands.
Al-Sanea is an entrepreneur who married into the Al-Gosaibi family. He led Saad Group, a separate financial services business that also collapsed in 2009.
“Longest-running trial”
The Cayman trial revolves around the claim from the Al-Gosaibi family that it was the victim of a $9.1bn fraud conducted by Al-Sanea, reports local newspaper the Cayman Compass.
Lawyers and executives involved in the litigation, which was initially expected to take seven months, say it is believed to be the longest-running and highest value proceedings ever held in Cayman.
The claims are contested by Al-Sanea, as well as by the liquidators of the Cayman Islands-registered companies.
Huge economic impact
More than 100 banks in Saudi Arabia, the wider Arabian Gulf region and the rest of the world are still owed billions of dollars in unpaid loans to Ahab.
Simon Charlton, executive officer and chief restructuring officer of Ahab estimates that almost $1bn will have been spent all over the world on lawyers, accountants and professional advisers before all the issues are resolved.
“It’s about time this ended. The professional fees have run into the hundreds of millions of dollars for the whole affair, the whole process of litigation and liquidation,” Charlton told newspaper Arab News.
“I wouldn’t be surprised if the total fees come to more than $500m, even as much as $1bn by the end of it.”
The cost of the Cayman trial alone could run to tens of millions of dollars, he said.
Not over yet
The legal teams will complete their closing remarks on Tuesday, just over a year since the opening of the case on 18 July.
With thousands of pages of transcripts, bank documents and witness testimony to consider, it will still be months before chief justice Anthony Smellie delivers his decision.
After that, an appeal is likely.
The result could affect the level of payout to Ahab creditors. Under Charlton, the company has offered to repay cash won from Al-Sanea in a deal it negotiated last year with creditors owed $6bn from the collapse.
Recently it announced it has got the agreement of a majority of banks and other creditors for a settlement that would return them a guaranteed minimum of 25 cents for each dollar owed, rising to about 50 cents depending on the result of legal actions against Al-Sanea.
In the Cayman trial, the Al-Gosaibi family businesses are represented by Mourant Ozannes, whereas Al-Sanea’s Saad Investments Company Limited (in official liquidation) and 15 other defendants are represented by Walkers, Harneys and HSM Chambers.
There are also ongoing legal actions in Saudi Arabia. A special judicial tribunal in Al-Khobar, the city in Saudi Arabia’s Eastern Province where the Al-Gosaibi was headquartered, recently took out a newspaper advertisement seeking lawyers, accountants and sales agents with regard to enforcement procedures against the assets of Al-Sanea and Saad Group.
