U.S. court backs Azeri bank IBA's petition over creditors

International Bank of Azerbaijan, the energy exporting country's biggest lender, said on Saturday a U.S. court had supported its petition to prevent creditors from pursuing legal action in the United States, giving it time to restructure $3.3 billion debt.

   

The state-controlled bank said on Thursday it was suspending payments on some liabilities and seeking creditors' support to restructure more than $3 billion of debt, mostly owed to foreign creditors, to tackle bad loans left over from an oil price slump.

   

The bank filed a petition under Chapter 15 of the U.S. bankruptcy code. Such a petition is not a bankruptcy filing but stops creditors from pursuing legal actions in the United States, giving debtors time to restructure their businesses.

   

"Foreign creditors won't be able to pursue legal actions against IBA's assets during the restructuring process," Khalid Ahadov, IBA's chairman, said in a statement on Saturday, commenting on the decision of the court in New York.