Germany Must Face Suit Over Hitler-Era Bond Default
Germany must face a lawsuit over bonds that defaulted under Adolf Hitler in the 1930s, a U.S. appeals court ruled, saying the nation isn’t immune from the claims and that American courts have jurisdiction to decide whether the bonds are enforceable.
World Holdings LLC, based in Tampa, Florida, claimed it owns a “significant number” of $208 million in bonds sold to U.S. purchasers following World War I and has been rebuffed when it sought repayment by the German government. The firm is seeking “hundreds of millions of dollars” in the suit, said Michael Elsner, an attorney for the investors.
Germany sold the bonds to finance rebuilding following the conclusion of the war, according to court papers. By the mid- 1930s, after Hitler became chancellor, Germany had stopped making payments on the bonds in the run up to World War II, according to the ruling issued yesterday by the federal appeals court in Atlanta.
“They decided from the ‘30s on that they were not going to pay this debt,” Elsner said in an interview.
Gerald Houlihan, an attorney for the German government, declined to immediately comment on the decision.
Under a 1953 treaty, the bondholder must show the bonds were held outside Germany as of Jan. 1, 1945, to ensure repayment. World Holdings claims the validation is unnecessary for those who didn’t originally accept the terms of the London Debt Agreement, also completed in 1953, which aimed to settle most of Germany’s pre-World War II debt....
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World Holdings LLC, based in Tampa, Florida, claimed it owns a “significant number” of $208 million in bonds sold to U.S. purchasers following World War I and has been rebuffed when it sought repayment by the German government. The firm is seeking “hundreds of millions of dollars” in the suit, said Michael Elsner, an attorney for the investors.
Germany sold the bonds to finance rebuilding following the conclusion of the war, according to court papers. By the mid- 1930s, after Hitler became chancellor, Germany had stopped making payments on the bonds in the run up to World War II, according to the ruling issued yesterday by the federal appeals court in Atlanta.
“They decided from the ‘30s on that they were not going to pay this debt,” Elsner said in an interview.
Gerald Houlihan, an attorney for the German government, declined to immediately comment on the decision.
Under a 1953 treaty, the bondholder must show the bonds were held outside Germany as of Jan. 1, 1945, to ensure repayment. World Holdings claims the validation is unnecessary for those who didn’t originally accept the terms of the London Debt Agreement, also completed in 1953, which aimed to settle most of Germany’s pre-World War II debt....