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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Snowshoe who wrote (65466)	8/19/2010 5:49:34 PM
From: TobagoJack	Read Replies (2) \| Respond to of 219449

just in in-tray Germany’s defaulted gold bearer bond Posted by Izabella Kaminska on Aug 19 08:26. Err, shouldn’t the fact that Germany is potentially facing a multi-billion dollar lawsuit for defaulted hyperinflation-era gold bearer bonds be triggering more news flow than just this Bloomberg story? 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. We stumbled across it whilst researching examples of inflation-linked bonds that traded at a negative rate in the past – specifically the zloty bon skarbowy (Polish Gold Treasury bill) of 1923 — issued the year before the country adopted a new gold-backed currency in a bid to stop hyperinflation. But the Bloomberg story leaves out one critical fact; the bonds’ ‘gold bearer’ status. From claimant World Holdings’ press release: World Holdings filed an amended complaint in the case on June 3, 2008, in federal court in Miami to obtain payment on U.S. Gold bearer bonds, known as Dawes Bonds and Young Bonds, that Germany issued to thousands of individual American and other investors in 1924 and 1930. The bonds were bearer bonds sold in the United States, traded on the New York Stock Exchange and backed by the full faith and credit of Germany. World Holdings currently owns or controls a large number of Dawes and Young Bonds sold to U.S. purchasers and is charging Germany with breach of contract based on the country’s alleged default of its obligation to pay the outstanding principal and accrued interest on these bonds. The lawsuit seeks damages in the amount of outstanding principal and accrued interest. “We are pleased by the court’s decision,” said Motley Rice attorney Michael Elsner, who represents World Holdings. “We may now move forward with the case, and our client will have the opportunity it deserves to establish that its bonds should be enforceable and that Germany should be held accountable.” World Holdings’ claim presumably reflects a small amount of the total issuance. It’s no surprise then that so-called Dawes and Young bonds have been amongst the most highly sought after by bond collectors, for some time. This is what one looks like by the way – just in case some FT Alphaville readers are sitting on untold treasure in their attic (www.dawesbond.com).