International Bank of Azerbaijan makes Chapter 15 bankruptcy filing

By Caroline Salls

Pittsburgh, May 15 – The International Bank of Azerbaijan made a Chapter 11 bankruptcy filing on May 11 in the U.S. Bankruptcy Court for the Southern District of New York to gain U.S. recognition of its voluntary restructuring proceedings in the Nasimi District Court in Baku City, Azerbaijan.

Through the Chapter 15 case, the bank is seeking court approval to safeguard from attachment or set-off four U.S.-located “correspondent accounts” used to complete daily transactions with various other financial institutions, guard against U.S. lawsuits by creditors during the course of the restructuring proceeding and complete the restructuring of its dollar-denominated debt by obtaining recognition of the restructuring proceeding and, ultimately, the plan approved in that proceeding.

As previously reported, creditors will be asked to approve a plan that will exchange the bank’s senior and junior foreign currency obligations for direct sovereign obligations of the Republic of Azerbaijan.

While the restructuring is under way, the bank suspended all payments of principal and interest except for trade finance facilities.

The bank did not make the principal and interest payment due on May 10 on a $100 million subordinated loan owed to Rubrika Finance Co. Ltd.

Depositors will not be affected and the bank will continue business as usual.

The restructuring began on May 4.

The bank is represented in the Chapter 15 case by White & Case LLP.

International Bank of Azerbaijan is based in Baku, Azerbaijan. The Chapter 15 case number is 17-11311.

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