A Cayman judge has ordered the founder of troubled equity firm Abraaj to pay for the costs of a recent hearing in the jurisdiction regarding the company's restructure attempts out of his own pocket.
At the hearing, Abraaj's largest creditor, Kuwait's Public Institution for Social Security argued that Dubai-based company is insolvent and that there are no prospects for restructuring the company.
Representatives for Abraaj's provisional liquidator, PricewaterhouseCoopers, responded that they "have sympathy" for the Kuwaiti creditor's position, but that the best approach for the company is to extend the restructuring process, local news outlet Cayman Compass reports.
Abraaj has been under provisional liquidation since June, which the firm says allows it to restructure its debt, protect the rights of all stakeholders, and continue its day-to-day operations with minimum impact.
Grand Court Justice Robin McMillan sided with the provisional liquidator and the founder Arif Naqvi, ruling that the restructuring should continue for at least another three months and that Abraaj should have more time to sell its assets in an attempt to continue operations.
However, the costs of the hearing are not to be covered by Kuwait's Public Institution for Social Security, who requested the hearing, as Naqvi pushed for.
"In matters of so complex a nature the Court must be fully receptive to weighing such arguments as a relevant party may wish to put forward. To impose upon an unsuccessful creditor a costs order where its arguments have failed in these circumstances could be perceived as limiting or discouraging the expression of entirely legitimate differences of opinion," Justice McMillan stated. "Accordingly, Mr. Naqvi and Mr. Jafar must bear their own costs of the hearing."
The judge added he was not satisfied that Naqvi was even a party to the case, as he was not a creditor and has no interest in the economic outcome of the liquidation.