US Bank wins court ruling

PPI,  Mar 2008  

• E-mail
• Print
• Link

WORLDWIDE

A New York City federal court has granted the US Export-Import Bank (Ex-Im Bank) summary judgment in a case against Asia Pulp & Paper Company (APP).

The bank won the ruling in a civil suit to recover more than $104 million in defaulted loans from the holding company based in Singapore and three of its main Indonesian operating companies, These comprise lndah Kiat Pulp & Paper, Pabrik Kertas Tjiwi Kimia and Pindo Deli Pulp & Paper Mills.

In March 2001, APP announced that it would cease repayment of its debts, which totaled approximately $13.9 billion. Following the news Ex-Im Bank said that it participated in extensive discussions with APP and its Indonesian operating companies, as well as other creditors, in an attempt to reach an acceptable consensual restructuring solution and avoid litigation.

However, it indicated that ultimately the bank opposed the final restructuring plan that was negotiated among APP, its operating companies and certain of its other creditors. The bank added that it deemed it necessary to go to court to assert its rights, and the US Attorney's office successfully litigated the case.

It remains to be seen whether the US ruling can be enforced abroad, though. A money judgment of $400 million was awarded in 2004 by the New York state supreme court to some of APP's bondholder creditors, which meant they could seek enforcement against its assets in any location. But their bonds were later nullified by some Indonesian courts, which the creditors planned to appeal.

The noteholders then won a turnover motion last year, filed with the New York state supreme court, ordering certain APP businesses to pay the creditors sufficient funds to satisfy $68 million of the money judgment awarded in 2004. It is not clear if they did so.

Copyright Paperloop, Inc. Mar 2008
Provided by ProQuest Information and Learning Company. All rights Reserved