U.S. investment company sues Ecuador over default of bonds in 2008

forbes.com/Nathan Vardi reported… GMO Trust, the Boston investment company co-founded by prominent investor Jeremy Grantham, has sued the Republic of Ecuador in Manhattan’s federal court over the default of Ecuador’s foreign bonds in 2008, setting the stage for a second big U.S. court fight between a large U.S. financial firm and a sovereign South American nation.

Ecuador’s so-called selective default in 2008 has long been viewed as a big victory for the country. A self-described socialist, President Correa carefully carried out his debt repudiation policy by ordering that payments not be made on $3.2 billon of Ecuador’s foreign bonds during the global financial crisis, some two years after he started threatening to take such an action. Ecuador then in 2009 repurchased most of those foreign bonds, about 91% of them, with cash and at a massive discount—35% of face value. Read Article

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