US Ex-Im Bank wins lawsuit on Asia Pulp bad loans

Mon Feb 11, 2008 10:59pm GMT
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NEW YORK, Feb 11 (Reuters) - The Export-Import Bank of the United States won a lawsuit to recover more than $104 million in defaulted loans from paper products maker Asia Pulp & Paper Co Ltd and some of its one-time units, U.S. prosecutors said on Monday.

The lawsuit alleged three of Singapore-based Asia Pulp's one-time Indonesian operating companies -- PT Indah Kiat Pulp & Paper, PT Pabrik Kertas Tjiwi Kimia and PT Pindo Deli Pulp & Paper Mills -- defaulted on 13 loan agreements with the bank, the U.S. attorney's office in Manhattan said in a statement.

Asia Pulp had unconditionally guaranteed repayment of three of those loans, prosecutors said. The order was filed on Feb. 6.

The Export-Import Bank is an independent federal government agency that finances the sale of U.S. exports by providing loan guarantees, export credit insurance and direct loans.

Asia Pulp said in March 2001 it would stop repayment of its worldwide debts, which totaled about $13.9 billion, prosecutors said.

The bank had extensive talks with the company and its units to avoid litigation, but finally opposed the company's restructuring plan, prosecutors said.

In granting summary judgment, the U.S. District Court in Manhattan rejected arguments raised by the defendants that the bank's taking part in negotiations prevented it from enforcing repayment of the debt, prosecutors said.

The defendants' lawyer, Kenneth Puhala, declined to comment. (Reporting by Paritosh Bansal; Editing by Braden Reddall)

 
 
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