Word: morgans
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Dates: during 1970-1979
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West German bankers have been particularly angry. Morgan Guaranty, one of Chase's U.S. partners in the defaulted $500 million loan, went into a German court and attached Iran's 25% investment in two big German companies, Friedrich Krupp and Deutsche Babcock. Last Tuesday, a day after a terrorist bomb exploded outside the bank's Frankfurt office, Morgan obtained a second court lien on the same assets to cover yet a further Iranian debt. The German bankers had thought they would have first call on these assets if Iran failed to pay some of its German loans...
...Morgan Guaranty argued that the attachment orders, which are automatically issued in West Germany in cases of disputed debts, were necessary to cover possible losses from Iran's default on a $500 million loan. It had been made by an eleven-bank syndicate that included Morgan and was headed by Chase Manhattan Bank. In fact, Morgan Guaranty's $40 million share of the loan is more than covered by the estimated $8 billion to $9 billion in Iranian assets that were frozen in U.S. banks by presidential decree...
That was certainly true for the West German government. In a move that left Bonn officials sputtering in helpless surprise, Morgan Guaranty Trust, the U.S.'s fifth largest bank and a leading creditor of the Iranian government, quietly went into an Essen court and attached Iran's 25% share of two of West Germany's best-known companies, Friedrich Krupp GmbH, a diversified steel and engineering combine (1978 sales: $5.9 billion), and Deutsche Babcock, a manufacturer of industrial equipment (1978 sales: $1.6 billion). Iranian stakes in the two companies were acquired under the Shah...
...West Germans, the Morgan Guaranty action was an unnecessary power play that, because of the court action, threatened to propel West Germany directly into the U.S.-Iranian conflict. Said a finance ministry official in Bonn: "It was a damned stupid thing to do. This is endangering not only our business interests, but the lives of 1,500 West Germans still in Iran...
...attachment order must be followed by court trial in which Morgan Guaranty is expected to argue that it needs to hold onto the shares until Tehran guarantees that its loans will be repaid. Meanwhile, more asset seizures seem likely. Asserted an officer of a New York City multinational bank: "We are going to grab every Iranian asset in sight. There is already a line of banks halfway down the block in West Germany waiting to do the same thing...