Court cuts vulture fund's claim (against Zambia)

[Eugene]

Source: The Guardian

Court cuts vulture fund's claim

· Zambia's debt repayment reduced by $40m
· Judge says much of firm's evidence was dishonest

Ashley Seager
Wednesday April 25, 2007
The Guardian

A "vulture" fund seeking more than $55m (£27.5bn) from Zambia had its
wings clipped in the high court yesterday by the judge who limited its
claim to $15.5m and cut its award of costs because of its "dishonesty".

The judge also refused an application to extend a freezing order on
Zambian assets in Britain to include assets held abroad, again citing
the company's dishonesty.

US company Donegal International had purchased some Zambian
sovereign debt from Romania in 1999 for $3.2m. It then pursued
Zambia for the face value of the debt but agreed with the
impoverished African nation in 2003 to accept $16m.

-snip-

Mr Justice Andrew Smith ruled in February that the 2003 agreement
was legal but that the ratcheting up of the amount payable in the
case of default was penal and struck it out. Yesterday he confirmed
that the award would total $15.5m, the original amount outstanding
plus $2m of interest.

-snip-

Read more: http://www.guardian.co.uk/debt/Story/0,,2064866,00.html