If we get the deal done, I’d like to help the family rebuild. And maybe advise other families who find themselves in trouble.
didn’t understand what was happening,” Charlton said.
It was an unprecedented event in Saudi business history, where the practice of “name lending” — approving bank loans on the strength of a family’s reputation rather than its credit rating — was long established.
The situation was complicated by the lack of a bankruptcy code that could have smoothed the liquidation and repayment process. A law is currently being prepared, which leans heavily on the lessons learned from the Al-Gosaibi case over the past eight years.
“The other problem was that there was no center. It began in Bahrain, spread to Saudi Arabia and then went all over the even more complicated by the attitude of the Saudi creditors who were owed about one-third of the total debts. They declined all invitations to get involved in the negotiations regarding a settlement, preferring litigation, and have still not been involved in any of the series of creditor meetings that have taken place over the last eight years.
The Saudi authorities, conscious of the potential damage the affair could do the Kingdom’s reputation in international financial markets, early on appointed the so-called “King’s Committee” — a body of senior policymakers and financial officials — to find a resolution, and by 2012 it had reached a decision: The two parties were ordered to find a solution, but there was