NEW YORK AND HAMBURG / ACCESSWIRE / July 11, 2018 / Holders of more than EUR 900 million of HSH Nordbank AG ("HSH") (STUTTGART: DE000HSH4H62) tier 1 instruments have filed an application in the United States for judicial assistance under 28 U.S.C. 1782. The holders request the right to serve subpoenas on Cerberus Capital Management, L.P., J.C. Flowers & Co. LLC and GoldenTree Asset Management L.P. in support of planned litigation in Germany solely against HSH.
The German litigation will focus on whether the tier 1 holders have been subject to improper and unlawful treatment by HSH.
In February of this year, HSH announced a concurrent sale of the majority of its shares and a portfolio of its loans to essentially the same set of buyers. HSH recognized a significant loss on the loan portfolio sale, which in turn purportedly caused a write-down of the tier 1 instruments. The tier 1 holders allege that no effort was made to market the loans in a competitive process and that the loan portfolio sale may have been structured to impermissibly benefit the buyers at the expense of the tier 1 holders. The subpoenas seek documents relating to these transactions as the German litigation will focus, among other things, on whether these related sales improperly burdened the tier 1 holders.
The application details additional allegations, including the charge that over many years HSH made repeated and, the holders allege, impermissible contributions to a statutory reserve (§340g of the German Commercial Code) which can only be properly used to protect against general banking risks. These contributions have purportedly allowed HSH to write-down the tier 1 instruments. The subpoenas also seek documents related to these additional allegations.
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SOURCE: HSH Nordbank AG