(Bloomberg) -- A fund representing the United Arab Emirates’ Jafar family is seeking to recover about $300 million from Abraaj Holdings through a court-run restructuring of the embattled buyout firm, people with knowledge of the matter said.

The family, which owns Sharjah-based Crescent Petroleum Co., mandated Auctus to file a petition in the Cayman Islands last week to start a process that would allow Abraaj to avoid collapse and repay its debt, the people said, asking not to be identified because the matter is private.

Abraaj founder Arif Naqvi borrowed the money from the Jafar’s late last year and defaulted in February, some of the people said. Abraaj declined to comment, while representatives for Crescent Petroleum didn’t respond to requests for comment.

Auctus filed the application seeking the appointment of court-approved professionals in the Cayman Islands to properly manage a restructuring of Abraaj’s liabilities “in an orderly and optimal fashion,” Auctus’ law firm Kobre & Kim said in an emailed statement.

Board Member

Crescent Petroleum President Badr Jafar is also an Abraaj Holdings board member. Crescent is also the largest shareholder in Dana Gas PJSC, which just ended a year-long dispute with creditors to restructure a $700 million Islamic bond.

Auctus is the second creditor to start legal proceedings against Abraaj as pressure mounts on what used to be one of the developing world’s most influential investors. Kuwait’s Public Institution for Social Security last week filed a petition for the liquidation of Abraaj’s holding company after it defaulted on a $100 million loan. Abraaj Holdings is also said to be planning to file for provisional liquidation in the Cayman Islands as early as this week to head off creditor advances.

The Wall Street Journal first reported on June 11 that Auctus had filed a petition in the Cayman Islands court system without saying who it was representing.

The Dubai-based investment firm, which once managed almost $14 billion for institutions and supranational agencies from the U.S., U.K. and other countries, faces growing concerns about its viability and impending loan repayments. The company has been under pressure since February when some of its investors commissioned an audit to investigate the alleged mismanagement of money in its healthcare fund.

Abraaj has been selling assets to raise liquidity and has also been in talks to sell its asset-management division. Societe Generale SA and Mashreqbank are also creditors to the private equity firm, according to people familiar with the matter.

(Corrects name of Abraaj board member in fifth paragraph.)

--With assistance from Matthew Martin.

To contact the reporters on this story: Arif Sharif in Dubai at asharif2@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net;Tracy Alloway in Abu Dhabi at talloway@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Jon Menon

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