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KHASHOGGIS DROP OBJECTIONS TO DISBURSEMENT AT LAST MINUTE

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In an eleventh hour concession, Adnan and Essam Khashoggi withdrew their objection to the Triad trustee's disbursement of $2.1 million to Triad America creditors.

The brothers withdrew their objection only 30 minutes before the hearing on the disbursement was scheduled to begin. "Right up until then, it looked like we were having a blood-letting," said Danny C. Kelly, attorney for the trustee.The trustee's attorneys and three lawyers for Essam met for six hours Thursday before the hearing. In the hearing, U.S. Bankruptcy Judge John H. Allen approved the payment of $2,072,395 to about 75 creditors. Triad trustee R. Todd Neilson plans to mail the checks Dec. 31.

Allen also authorized Neilson to go ahead with a sale of 1.9 acres of Triad America land - known as Triad One - to the Salt Lake Redevelopment Agency. The land is located across the street from the proposed Utah Jazz arena and will be used for a parking lot.

Although the Khashoggis withdrew the objections they had filed on Monday, the issues prompting those objections have not been resolved, Kelly said.

"They've just decided they won't try to hold up this ($2.1 million) distribution," Kelly said. "That doesn't mean we've resolved the underlying problem."

The problem is complicated. Neilson wants the Khashoggis to drop their "administrative claims" against the Triad estate. What those claims actually mean is part of the dispute. Neilson and his lawyers agree that if the Khashoggis end up having to pay any creditors that Neilson failed to get releases from, Neilson will be reimburse the Khashoggis.

But several suits Neilson recently filed have prompted the Khashoggis to question the terms of the settlement they made with Neilson.

Neilson filed $28 million in suits against several banks who loaned that amount to the Khashoggis and their companies. Those loans, Neilson asserts, were paid with Triad America money even though Triad America received no benefit from the loans. The bulk of the suits - $25 million - were filed against Wardley Bank in Hong Kong and TDB American Express Bank in Switzerland.

Neilson is suing to get Triad America's $28 million back. The Khashoggis are fearful that if Neilson wins his suits, the banks will turn around and sue them, they said in court papers.

In objections filed in U.S. Bankruptcy Court Monday, the brothers claim the language of a $32 million settlement they made with Neilson in August 1988 prohibits suits like those he has filed against the banks. The Khashoggis also assert that the claims they filed against the Triad estate mean that if anyone successfully sues them because of their involvement with Triad America, they can take the money they lose in the suits out of the Triad America estates, Kelly said.

"That's like a big black hole looming on the horizon that could potentially eat up all the money sitting in the estate," Kelly said. The specter of that has prompted Neilson to pressure the Khashoggis to withdraw their claims.

Neilson has offered to drop his $28 million in suits against the banks if the Khashoggis will withdraw their claims on the Triad estate, Kelly said. To date, the Khashoggis have refused and Neilson is pursuing his suits.

Neilson has disbursed $6,074,257 to Triad America creditors. He plans to ultimately distribute about $36 million.