Adnan and Essam Khashoggis' $32 million payment to their creditors moved one step closer to deposit in a Salt Lake bank Monday when Federal Bankruptcy Judge John H. Allen approved the agreement between the Khashoggis and Salt Lake accountant R. Todd Neilson.
Neilson is the court-appointed trustee for the bankrupt estate of Triad America. He has spent a year trying to get money from the Khashoggis to pay off creditors of Triad America.The agreement, finalized Sept. 13 after months of negotiations, calls for the Khashoggis to wire $32 million to a bank account of Neilson's choosing by Oct. 31 if several conditions are met. One of those conditions - approval of the agreement by the U.S. Bankruptcy Court - has been met.
Neilson has selected Key Bank, 50 S. Main, to receive the money.
In order to receive the money, Neilson must obtain releases from 14 creditors - including six Salt Lake businesses - saying they won't sue the Khashoggi brothers and several international Khashoggi companies for money the creditors may believe is owed to them. The language of the releases says the businesses will not seek to get any money from the Khashoggi men, Triad International Corp. or its subsidiaries and Elk International Corp. or its subsidiaries.
If the companies sign the releases and give up their right to sue the Khashoggis, they instead will have to queue up with scores of other creditors for a piece of the $32 million the Khashoggis will send. In essence, the Khashoggis are trying to resolve all of their American financial problems with the one hefty payment.
If any one of the 14 companies refuses to sign a release, the Khashoggis have the right to call the whole deal off, forcing Neilson to seek payment through a lengthy, international court battle.
"I genuinely believe this is all the money we can get," Neilson said in his testimony Monday.
Speaking of the elusive Khashoggi brothers who have successfully hid their assets in mysterious companies throughout the world, Neilson said, "We're not dealing with General Motors. You don't go down and put a lien on their plant. We don't even know where the plant is."
The Khashoggis' offer of a $32 million payment represents a sincere desire to solve their American problems, Neilson said.
Not all of the 14 creditors on the Khashoggis' list have claims against Khashoggis or their companies, but the brothers are seeking the releases as protection against future lawsuits, said Danny Kelly, attorney for Neilson.
If one of the companies balks, Neilson must notify the Khashoggis by Oct. 1 of the company's refusal to sign a release. If the brothers decide the release from that particular company is not crucial to the deal, they must let Neilson know the deal is still on by Oct. 7.
If Neilson has not heard from the brothers by that date, the deal is off. Neilson, his army of attorneys and scores of hungry creditors will have to start all over again to seek money from the Saudi brothers.
First Security Mortgage Co. and First Security Bank have already signed a release as part of a settlement made with Neilson. If the court approves the settlement, First Security may eventually receive, in cash or land, nearly 100 cents on the dollar for loans it made to Triad America and several subsidiaries.
Zions Bank also has a settlement agreement with Neilson that may net about 70 cents on the dollar, Neilson said. That agreement also calls for the bank to release the Khashoggis from future suits.
However, four other Salt Lake companies are being asked to sign releases with no guarantees that they will receive any of the $32 million.
The following Salt Lake companies are being asked to sign releases promising not to sue the Khashoggis and their specified companies for the following amounts: Redevelopment Agency of Salt Lake City, $5.8 million; Alta Industries LTD, $1.4 million; Edwards and Daniels Associates, $1.3 million, and Tracy Collins Bank, $1.9 million.
Neilson does not believe the claim by the Redevelopment Agency of Salt Lake City is legitimate, he said. Additionally, the claim was filed after the deadline. For those reasons, Neilson will vigorously oppose the agency's attempt to collect any money.
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