A US court has denied a motion from HSBC USA to have Bahrain-based Awal Bank removed from US Chapter 11 bankruptcy protection.

The US Bankruptcy Court for the Southern District of New York also ruled that Awal would be allowed to continue with adversary proceedings against HSBC USA in the same court and agreed that it would not have to disclose specific details about its creditors.

Charles Russell is acting as external administrator and foreign representative for Awal Bank, which was placed into administration by the Central Bank of Bahrain (CBB) in 2009.

Charles Russell partner and Middle East head Clive Hopewell said the ruling would allow action to continue against HSBC in a manner which is in keeping with both the US Bankruptcy Code and the Bahraini administration.

Awal Bank secured bankruptcy protection in order to support the Bahraini administration and assist its representatives in recovering assets within the US for the benefit of all of its creditors.

In its capacity as external administrator, Charles Russell LLP commenced action against HSBC for the recovery of around $13 million.

The US-based legal activities involving Awal Bank form part of a multinational litigation process, with court proceedings also currently underway in Bahrain, the Cayman Islands, Saudi Arabia, Switzerland and the UK. – TradeArabia News Service