PRC Defaulted Debt
Via Registered Mail and Electronic Mail
December 9, 2009
Mr. Robert Pietrzak
Partner and Member of the Executive Committee
Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Re: Disclosure obligation concerning litigation in respect of future U.S.
registered offerings of debt securities of the People�s Republic of
China.
Dear Mr. Pietrzak,
The law firm of Sidley Austin Brown & Wood LLP is identified as the issuer�s
counsel to the People�s Republic of China in the United States prospectus dated October
16, 2003:
Legal Advisors
To the Issuer As to United States Law
Sidley Austin Brown & Wood LLP
787 Seventh Avenue
New York, New York 10019 1
Accordingly, please be informed that Sovereign Advisers, Inc. serves as the
Trustee of the Starwood Trust, an Arizona revocable grantor trust which represents the
beneficial holders of full faith and credit sovereign obligations of the pre-1949 Chinese
governments. Under the successor government doctrine of settled international law, the
People�s Republic of China, as the internationally recognized government of China, is the
obligor of this debt, which remains unpaid and in a state of default.
Included with this correspondence is a copy of a letter recently sent to officials of
the Chinese Government asserting a demand for repayment of this debt. Also included
are copies of two complaints filed with the United States Securities and Exchange
Commission and a copy of a letter sent previously to Sidley Austin Brown & Wood LLP
by the law firm of Stites & Harbison PLLC in connection with a separate, yet related
matter.
1 Registration no. 333-108727. (ISIN US712219AJ30 / CUSIP 712219AJ3). See prospectus dated October
16, 2003 and the prospectus supplement dated October 22, 2003:
(
PEOPLE'S REPUBLIC OF CHINA RULE 424(B)(5)).
SOVEREIGN ADVISERS, INC.
TRUSTEE
THE STARWOOD TRUST
Mr. Robert Pietrzak
December 9, 2009
Page Two
In the event that our demand to the People�s Republic of China for repayment of
the subject debt is refused or ignored, we intend to file litigation in the United States
against the People�s Republic of China and other parties which have assisted and
continue to assist the People�s Republic of China in evading its repayment obligation,
including the construction and operation of a sovereign credit rating artifice. The facts
comprising the situation described in the attached demand letter are distinguished from
both Morris and Bolanos Pons and Soria, and involve evidence of at least one instance in
which we believe Sidley Austin misled the District Court in Morris.
We bring the matter described in this letter to your attention in order to ensure
proper disclosures are made in any future U.S. registration statement and prospectus
pertaining to the offer, sale or issuance of registered debt obligations of the People�s
Republic of China within the United States capital markets.
Sincerely,
Kevin O�Brien, President
Sovereign Advisers, Inc., Trustee of the Starwood Trust
cc: Meredith Cross, Director
Division of Corporation Finance
United States Securities and Exchange Commission
Steven W. Phillips, Esq.
Phillips Moeller & Conway PLLC
Enclosures
1. Copy of letter from Phillips Moeller & Conway PLLC to officials of the People�s
Republic of China asserting a demand for repayment of the debt.
2. Copy of complaint filed with the United States Securities and Exchange
Commission describing violations of Rule 10b-5 and Section 10(b) of the
Exchange Act.
3. Copy of amendment to the complaint filed with the United States Securities and
Exchange Commission alleging the commission of fraud.
4. Copy of letter from Stites & Harbison PLLC to Sidley Austin Brown & Wood
LLP dated December 31, 2003.
