A New York hedge fund is demanding that Anglo Irish Bank be stopped from transferring $10.7bn (€7.9bn) of assets out of the US until the lender pays it all the money it is owed.
Fir Tree Capital, a hedge fund with offices in New York and Miami, wants Anglo's decision to force losses on certain bond and noteholders to be adjudicated under New York law.
In hard-hitting legal submissions, the fund attacks the decision of Anglo to allow its loans to be moved into NAMA at a 62pc discount. It says this ended up "greatly reducing the assets available to pay creditors such as the noteholders''.
It described NAMA as a special purpose vehicle (SPV) owned by the Government and three banks. It says Anglo transferred €35bn of loans to this SPV, but got "just" €13bn in return.
It now wants Anglo to honour its commitment to pay principal and interest on notes with face value of $200m.
It also wants a receiver appointed to Anglo's US operations, at least until the repayments have been secured.
The fund, which invests in the US mortgage market, claims that a merger with Irish Nationwide also breaches previous agreements between Anglo and noteholders, including that any merge must be with a solvent entity and one that can make repayments to noteholders.
The company claims that Anglo agreed when issuing the notes that New York law would be applicable if a breach or default occurred.
Meanwhile, senior bondholders of Anglo and Irish Nationwide will suffer losses on their investment despite European Central Bank (ECB) objections, a report from NCB Stockbrokers said.
The senior unsecured bonds of Anglo and Irish Nationwide "will not be repaid in whole, with either a coercive debt buy-back or gradual payments as and when assets are realised", NCB Stockbrokers said in a note to clients.
A coercive buy-back of senior debt issued by the two banks at 30cent in the euro would save €2.5bn, the report said.
Last night traders said senior Anglo bonds were trading at 57 cent in the euro, down from 70 a week ago. Irish Nationwide trades less often but bonds are reckoned to be traded at around 60 cent in the euro, implying a 40pc haircut.
Bondholders of more viable banks are less vulnerable to the losses, NCB told its clients.
The most important objection to sharing losses on the banks with the senior bondholders comes from the ECB.
The bank is funding the Irish bank sector and fears any losses suffered on senior bonds here would drive up funding costs for banks across the EU.
Despite its stated opposition to burden sharing, NCB believes the ECB is likely to give ground on that issue, but only in relation to non-viable banks.