SALT LAKE CITY -- The U.S. holding company of flamboyant Saudi businessman Adnan Khashoggi has filed for Chapter 11 bankruptcy protection to stave off at least $150 million in lawsuits, a company lawyer said Wednesday.
Khashoggi has claimed he was a middleman in the U.S.-Iran arms deal and that he lost $10 million in the transaction. He said he expects the United States to repay him.
'It's an automatic stay. A stay is equivalent to a restraining order against creditors,' lawyer John Ashton said. 'All the pending actions are restrained depending on further application to bankruptcy court.'
At least eight affiliated companies in three states were named in the bankruptcy petitions filed in Los Angeles federal court on Tuesday and Wednesday.
The companies included Triad America Corp., the Triad Center, Salt Lake International Center, Triad Utah, Triad Hotel Associates, Triad Properties Corp., all of Salt Lake City, AK Houston Properties Inc. of Texas and AK Florida Properties NV.
Combined figures taken from court records for six of the named companies showed listed assets of $406.9 million and liabilities of $311 million.
The petition of AK Houston Properties said assets were 'presently indeterminable' and the amount of liabilities was 'in dispute.' Figures were not available for Triad Hotel Associates.
The filing puts on hold for at least 120 days all pending court actions, including a hearing scheduled Friday in a lawsuit in Utah's 3rd District Court by Traveler's Insurance Corp. of Hartford, Conn.
Traveler's claims Triad America, of which Khashoggi owns 80 percent, defaulted on more than $61.5 million in loans for a industrial park and office and retail complex in Salt Lake City.
The next-largest creditor is Sheraton Corp., the Boston-based hotel subsidiary of ITT Corp., which claims Triad defaulted on more than $40 million in cash and notes it loaned the firm to buy a downtown Salt Lake City hotel.
Arthur Miller, Triad America's acting secretary, was reportedly out of state, and Triad Center President Richard Nordlund said he could not comment on the bankruptcy petition.
Attorneys for Triad said a detailed list of assets and liabilities would be filed 'sometime after the bankruptcy petition.'
'What you do is submit a plan seeking to resolve and remedy the business problems of those respective companies,' Ashton said.
Khashoggi owns 12 estates, real estate in Houston and Denver, and a 1,600-acre ranch near Tampa, Fla.
In Paris, creditors have seized Khashoggi's lavish DC-8 jet with its $250,000 sable bedspread. Other creditors won court orders to gain possession of his 114,000-acre ranch in Kenya.
In New York, a state court has seized Khashoggi's two-floor Fifth Avenue duplex after he failed to pay a $2.2 milllion debt to Lonrho, a British mining and trading conglomerate.
Triad's Oasis Petroleum Corp., Culver City, Calif., 13 months ago filed for bankruptcy, claiming more than $40 million in debts. Triad attorneys last June told officials of the 3rd District Court that Khashoggi's U.S. companies were $163 million in debt.
Miller, at a recent federal court hearing, said Triad had assets of $80 million to $100 million if it sold a profitable subsidiary, Edgington Oil of Long Beach, Calif.
But a Utah federal judge, acting on a lawsuit by Sheraton Corp., prohibited Triad from selling Edgington to Skyhigh Resources Ltd. of Vancouver, British Columbia. Edgington in 1985 had sales of $500 million.
Sheraton claimed the sale was under the market value and that it was an inside deal to benefit Khashoggi, who owns a substantial portion of Skyhigh stock.