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Pastimes : Ask Mohan about the Market

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To: John Hunt who wrote (16362)	9/9/1998 9:48:00 AM
From: Defrocked	Read Replies (1) of 18056

John, did you see the lawsuit filed last week in US District court by a US fund manager against the LTCB and its proposed merger partner Sumitomo Trust and Banking Co.??? The gist of the suit appears to be that LTCB's decision to forgive $3.9 billion in non-performing assets without recourse to borrowers' collateral was motivated by Sumitomo's desire to avoid writing down loans to those same borrowers. Those mutual customers would be forced into bankruptcy without such loan forgiveness, thereby requiring similar writeoffs by Sumitomo. Sumitomo may be demanding such outright forgiveness by LTCB as part of the quid pro quo for taking over LTCB while simultaneously staving off its own balance sheet erosion at the expense of LTCB shareholders. The shell game goes on and on and on.<g>

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