Adnan Khashoggi will pay $32 million in cash to Triad America trustee R. Todd Neilson before Oct. 31 if Neilson and his army of attorneys can meet several conditions Khashoggi has set.

Details of the arrangement were revealed to the Deseret News by Neilson's attorneys Wednesday.Neilson, a Salt Lake accountant, has made tentative settlements with seven creditors - including First Security Bank and Zions First National Bank - for partial payment of their claims against Triad America. While the package of deals and Khashoggi's promised payment represents strong progress in a series of complex legal battles, the arrangement is still a tenuous house of cards.

The seven settlements depend on the $32 million from Khashoggi and a court ruling favoring substantive consolidation of the bankruptcy cases of Triad America and its several subsidiaries.

Khashoggi's payment, in turn, rests on several promises. In exchange for the cash, Neilson has agreed to obtain promises from Khashoggi's major creditors that they will not sue Khashoggi for further funds in the future, said Alan Sullivan, an attorney for Neilson.

If any of the major creditors refuses to make that assurance, Neilson must notify Khashoggi by Oct. 1. Khashoggi can then decide if he will waive an agreement from that particular creditor and go ahead with the deal, or if the deal falls through.

It will be up to Khashoggi to make that decision, said Danny Kelly, another attorney for Neilson.

Neilson and Khashoggi - and their various representatives - have agreed that if the deal is not consummated by Oct. 31, it is void.

"Halloween is the last day," Sullivan said. With few exceptions, each of the major creditors has claims against Khashoggi in excess of $1 million.

In addition to the $32 million, Khashoggi has also agreed to provide collateral for two debts totaling $27.2 million. Vertex Finances is seeking $21.3 million from Triad America while Euro Commerical Finances wants $5.9 million.

The Vertex loan was a personal loan made to Khashoggi, Kelly said. "That involves the Iranian arms deal," he said. "As far as we can tell, Vertex was the source of the $10 million for the deal."

Khashoggi used Triad America to secure the loan. Euro Commerical Finances claims it made a $5.9 million loan to Triad America. However, only $1.8 million was ever turned over to the company, Kelly said.

Originally, Khashoggi told Neilson he would take care of those debts himself, Kelly said. "Apparently he has been unable to do that." The companies are still pursuing Triad America for the money.

Now, Khashoggi has assured Neilson that if the court rules that Triad America has to pay any of those debts - except the $1.8 million the company did receive - Khashoggi will pay Triad America back.

To guarantee that assurance, he will put up collateral for the $27.2 million claims.

"It won't be just another promise from Khashoggi," Kelly said. Neilson's attorneys don't know what the collateral will be yet.

"It will probably be very liquid collateral, like a letter of credit or funds in a bank," Kelly said.

The settlement between Khashoggi and Neilson must be approved by bankruptcy court. The case is scheduled for early September, Sullivan said.

Khashoggi also agreed that his two brothers, Assam and Adil, will withdraw claims they have against Triad America. Adil will forgive a $2 million loan and Adnan will forgive two loans totaling $3.4 million.

Judge John H. Allen heard arguments for and against substantive consolidation Wednesday morning. Major creditors of Triad America and its bankrupt subsidiaries have withdrawn their objection to the consolidation in the wake of private settlements made with Neilson for partial payment of debts owed to them.

However, FIMSA - a subsidiary of First International Bank - urged Allen to proceed with the trial on substantive consolidation, including a public airing of the seven settlements. FIMSA's attorney, Mary Anne Wood, argued that her bank has no assurance that it will benefit from the substantive consolidation of the cases of the bankrupt companies.

However, FIMSA is not formally objecting to the consolidation. Wood said her client does not have the money to fight the case in court. She argued that interests of her client - and other unsecured creditors of Triad properties - were not represented in settlements made between Neilson and major creditors.

In behalf of the smaller, unsecured creditors, she urged Allen to proceed with the trial and allow smaller creditors to evaluate the details of the seven settlements or give a continuance and determine whether substantive consolidation would be in their interest.

Richard Pachulski, an attorney for Neilson, argued that there is no time to try the substantive consolidation. Some of the settlements are dependent on other proceedings in courts in other states. If those settlements are not finalized before those other proceedings are finished, "by definition, those settlements are dead."