A group of investment vehicles owned by a Bahraini bank are seeking US bankruptcy protection to shield more than $200 million from Saudi Arabia's Ahmad Hamad Algosaibi and Brothers, agency reports say.

Awal Finance Company, a subsidiary of Bahrain's Awal Bank, and half a dozen special-purpose vehicles last week filed for protection in US Bankruptcy Court in New York under chapter 15 - the section of the bankruptcy code that deals with international insolvencies, said a report in the Gulf Daily News (GDN), our sister publication.

Law firm Charles Russell, Awal's administrator and foreign representative appointed by Bahraini authorities, could not be reached for comment.

Awal was placed into administration in Bahrain in July 2009.

According to its Chapter 11 petition filed with the US bankruptcy court in Manhattan, Awal Bank has between $50 million and $100 million of assets, and more than $1 billion of liabilities.

Saad Investments Company owns a 48 per cent stake in the bank and Al Sanea owns 47 per cent, the petition shows.

Saad and Al Sanea have been involved in a series of lawsuits also involving conglomerate Ahmad Hamad Algosaibi and Brothers, Mashreqbank and others. Some of these lawsuits have included allegations of fraud and the misappropriation of billions of dollars.

Bahrain's central bank took control of Awal Bank and Algosaibi's International Banking Corporation in July 2009, citing a substantial shortfall in their assets relative to their liabilities. - TradeArabia News Service