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UBS, Croatia to settle US lawsuit over US$45m in Yugoslavia-era debt
[NEW YORK] UBS AG has reached a settlement with Croatia of a lawsuit filed in New York federal court claiming the republic owed it US$45 million on defaulted debt assumed after the breakup of Yugoslavia.
The settlement-in-principle was disclosed in a letter by UBS filed with the court late on Wednesday. The Swiss bank said it expects Croatia's government will approve a final settlement agreement and make a payment by Monday.
Financial terms were not disclosed in the letter. Neither a lawyer for Croatia nor a spokeswoman for UBS responded immediately to requests for comment on Thursday.
UBS filed the lawsuit in October, saying Croatia owed it nearly US$45.1 million in principal and interest on the defaulted debt.
UBS said Yugoslavia issued the debt in 1988 as part of a series of restructurings, as the country tried to keep its struggling economy afloat. The lawsuit said the terms of the notes in question called for any legal action to be filed in New York.
Yugoslavia broke up in the early 1990s amid years of civil war.
In 2001, the country's remaining external debt was divvied up among Croatia and the other successor states to Yugoslavia: Bosnia and Herzegovina, Macedonia, Slovenia, Montenegro and Serbia, according to the lawsuit.
The other countries fulfilled their debt obligations to UBS, the lawsuit said, leaving only Croatia in default.
Croatia and UBS have negotiated for years over the debt payments but had not come to a resolution, even though Croatia acknowledged its obligations, UBS said in its complaint.