Arcapita Bank won bankruptcy-court permission on Wednesday to move forward with talks to line up what could be one the first bankruptcy-financing deal compliant with Islamic Sharia law.

Judge Sean Lane of the US Bankruptcy Court in Manhattan authorised Arcapita, a Bahrain investment firm, to pay up to $500,000 to cover the expenses incurred by the lender it will soon choose to provide what Arcapita's attorney called an unusual financing package.