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May 15 (Bloomberg) -- Arcapita Bank BSC, an Islamic-compliant fund manager, won court permission to borrow $350 million from Goldman Sachs International to finance its exit from bankruptcy.

U.S. Bankruptcy Judge Sean Lane in Manhattan approved the financing today after Goldman Sachs and Fortress Credit Corp. revised their loan offers in an auction held in a conference room outside of Lane’s court. Goldman Sachs made the best proposal, Michael Rosenthal, a lawyer for Arcapita, told Lane.

“We appreciate that both of these bidders submitted revised proposals and we think both of them have contributed significant value to the estate,” Rosenthal said in court. The interest rate and other provisions of Goldman Sachs’s loan may be better for Arcapita and its creditors, he said.

Arcapita had gone before Lane today planning to weigh a revised offer from Fortress against an existing one from Goldman Sachs, which requested more time to confer. The companies then negotiated for more than an hour.

Arcapita, based in Manama, Bahrain, filed for Chapter 11 protection in March 2012 after being unable to complete an out-of-court restructuring of $1.1 billion in unsecured debt. It listed assets of $3.06 billion and debt of $2.55 billion.

A hearing on its Chapter 11 plan is set for June. Creditors support a proposed reorganization that will create a new company compliant with Islamic Shariah financing rules. The reorganized company will focus on generating income from Arcapita’s current portfolio and make no new investments.

The case is Arcapita Bank BSC, 12-bk-11076, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Tiffany Kary in New York at

To contact the editor responsible for this story: John Pickering at

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