Anglo Irish Bank faces $200 million U.S. noteholder suit
NEW YORK | Mon Feb 14, 2011 8:12pm GMT
NEW YORK (Reuters) - Anglo Irish Bank Corp ANGIB.UL, a nationalized lender being wound down by Ireland's government after huge losses, was sued by a New York investment firm concerned it may lose a $200 million (125 million pound) investment in the bank's debt.
In a complaint filed in Manhattan federal court, two affiliates of Fir Tree Partners Inc said Anglo Irish's asset sales and pending merger with the Irish Nationwide Building Society (INBS) will "leave behind an undercapitalized entity with inadequate resources" to pay debts.
The affiliates, Fir Tree Capital Opportunity Master Fund LP and Fir Tree Value Master Fund LP, added that Anglo Irish and INBS were downgraded by Moody's Investors Service last week to "junk" status, and that they see this combination as "imperilling the noteholders' ability to recover."
The complaint seeks to force Anglo Irish to preserve at least $200 million to satisfy its obligations to the Fir Tree affiliates. It also seeks to appoint a receiver to oversee enough U.S. assets to insure Fir Tree is paid.
Ireland late last year received a 85 billion euro (96 billion pound) bailout from the European Union and International Monetary Fund, in an agreement designed to force banks to sell assets and lower their reliance on European Central Bank funding.
On February 8, Anglo Irish said it expected to post a 17.6 billion euro loss for 2010.
The case is Fir Tree Capital Opportunity Master Fund LP et al v. Anglo Irish Bank Corp, U.S. District Court, Southern District of New York, No. 11-00955.