Saturday 21 October 2017

Anglo Irish rounds on New York hedge fund over action

Emmet Oliver

Anglo Irish has made its first response to a legal action by junior bondholders in New York, dismissing their case as "utterly meritless".

The nationalised bank has filed a highly aggressive response to a case being brought by hedge fund Fir Tree Capital, which is seeking to have all its debts honoured and an injunction placed on Anglo moving any assets out of US jurisdiction.

The Anglo filing, seen by the Irish Independent, accuses Fir Tree of trying to "twist" the recent crisis in the Irish banking system into personal gain for the company.

Anglo claims Fir Tree bought junior notes in Anglo at a deeply discounted price after the IMF/EU bailout of the Irish economy.

Anglo claims Fir Tree is seeking to make a major killing by being paid par for these notes.

But Anglo said it was determined to halt the Fir Tree case.

"The paramount public interest at issue is that of the people of the Republic of Ireland in the protection of their nation's banking system,'' states the Anglo legal submission.

Distressed

Fir Tree has bought what Anglo calls distressed debt and to honour its claims would "prejudice" the claims of Anglo's senior bondholders, the nationalised bank claims.

Anglo and Irish Nationwide have been fighting a rearguard battle against junior bondholders over the past six months, with many of the holders of the securities angry at what they see as unfair debt buybacks, some of them coercive in nature.

This is the first case of its kind in New York. Anglo issued the securities under New York law in 2005.

The deal was a private placement arrangement, although it is not clear who was the chief subscriber for the securities.

Irish Independent

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