Home » US Court denies GOSL motion to dismiss $257 million bond default case

US Court denies GOSL motion to dismiss $257 million bond default case

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By: Staff Writer Colombo (LNW):New York Federal Court rules in favor of Hamilton Reserve Bank against Sri Lanka bond default dismissing Clifford Chance’s defense on behalf of the SL government. The case will therefore proceed, to decide on whether the GOSL must immediately pay the There was no official statement of the government on this international news agency report and this court order has not been reported in major international news agencies such as Reuters and AFP . Denise Cote, Judge of the District Court of the Southern District of New York, on March 24 dismissed the motion filed by the law firm representing the GOSL, Clifford Chance US LLP US$280 million New York Court Judgment if Bond is not repaid.Sri Lanka was supposed to pay 5.875% interest on its international sovereign bond on July 25, 2022, but it was unable to do so due to the country’s ongoing financial crisis. The Hamilton Reserve Bank has demanded full payment of the $250 million owed, citing interest of more than $7 million. The bondholder has retaliated against the Sri Lankan government, claiming that the country’s default was orchestrated by people at the highest levels of government and that the Rajapaksa family was to blame. The Sri Lankan government has asked a US judge to dismiss the case filed by Hamilton Reserve Bank for defaulting on bonds, the financial news agency Bloomberg reported. The government had requested that the case in New York be dismissed over the country reaching debt default, stating that the case brought by one bank is an “apparent attempt to gain leverage over a nation in crisis and jump ahead of other foreign creditors.” Hamilton Reserve Bank, based in the Caribbean islands of St. Kitts & Nevis, filed legal action citing the country’s default on a $1 billion sovereign bond. The case will therefore proceed, to decide on whether the GOSL must immediately pay the outstanding amount. Denise Cote, Judge of the District Court of the Southern District of New York, on March 24 dismissed the motion filed by the law firm representing the GOSL, Clifford Chance US LLP. Based in the Caribbean nation of St. Kitts-Nevis, Hamilton Reserve Bank, which is being represented by the law firms of Bleichmar, Fonti & Auld LLP; and Jenner & Block LLP, brought the action for breach of contract, to recover the principal sum of $250,190,000 plus interest of 7,349,331.25 of the bonds. The 10-year bonds matured on July 25, 2022. The registered holder of the bonds are New York-based Cede & Co., while Hamilton Reserve Bank is the beneficial holder. Cede & Co. Has authorized Hamilton Reserve Bank to take action on behalf of Cede & Co. To recover the amounts. The GOSL’s argument was that Hamilton Reserve Bank had no authority as the registered holder of the bonds is Cede & Co. In dismissing the motion, the court recognized the validity of Cede & Co’s authorization to Hamilton Reserve Bank.
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