Update: China's Defaulted Debt: Remedies for U.S. Citizens

Update on China’s Defaulted Debt and Remedies for U.S. Bondholders


A complaint was filed last week with the DOJ on behalf of the U.S. Bondholders. Excerpts from the complaint are below, and you may view the full complaint here, (http://www.globalsecuritieswatch.org/DOJ_Antitrust_Complaint).

Excerpt from the Introduction and Prayer for Relief:

I. Introduction

1. This is a Complaint referencing an antitrust injury resulting from third party tortfeasance, including interference with the enforcement of commercial debt contracts and which interference, including the intentional aiding and abetting of the debt obligor’s efforts to evade repayment of the debt, has the effect of the taking of the Complainant’s rights in property, and which have caused the Complainant to be injured in its property.

2. This is also a Complaint alleging a pattern of civil racketeering under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Section 1961 et seq., (“RICO”), and further alleges that the named parties obtained unjust enrichment from their wrongful actions in assisting China in the shedding of its foreign debt obligation owed to the Complainant, and which actions were intentionally designed, constructed, and operated as a continuing enterprise which was specifically and intentionally designed to enrich the named parties at the expense of the Complainant and all other persons similarly situated.

5. The People’s Republic of China (“The People’s Republic of China” or the “Chinese Communist Government” or “Communist China” or “China”), is the internationally recognized Government of China and as such, is the successor government to the predecessor Chinese governments, including the Imperial Chinese Government and the Republic of China.

VI. Prayer for Relief

A. WHEREFORE, Complainant prays for the Antitrust Division of the United States Department of Justice to commence an investigation into the practices of the Three Primary Credit Rating Agencies as described in this Complaint and to bring an antitrust enforcement action against the named parties, including the specific relief stated below.

1. Antitrust Injury

360. Complainant realleges and incorporates herein, as though fully set forth, the allegations of all preceding paragraphs of the Complaint.

361. The Three Primary Credit Rating Agencies collectively control approximately, or in excess of, 95% of the international credit rating industry and so in effect are constituted as the industry.

362. By their actions, the Three Primary Credit Rating Agencies have caused Complainant to suffer economic injury and such injury is of the nature of an antitrust injury.

2. Civil Racketeering

363. Complainant realleges and incorporates herein, as though fully set forth, the allegations of all preceding paragraphs of the Complaint.

364. The Three Primary Credit Rating Agencies, the Debt Underwriters, the Clearing Agents, the Paying Agents, and the Law Firms, collectively constituted as participants in the Capitalist China enterprise, conspired to construct and operate an enterprise, whose operation is dependent upon an artifice, in order to reap windfall profits at the expense of the defaulted creditors.

365. By their actions, the Three Primary Credit Rating Agencies, the Debt Underwriters, the Clearing Agents, the Paying Agents, and the Law Firms, have caused Complainant to suffer economic injury and such injury is of the nature of a civil racketeering injury.

366. On the basis of the factual evidence as stated herein, Complainant prays for a summary administrative adjudication and order of injunction restraining the continuation and furtherance of the injurious actions of the Three Primary Credit Rating Agencies and suspending the publication and distribution of the falsehood, namely the international sovereign credit rating assigned to China, until such time as the Debt is repaid in full, including the loan principal and all interest due thereon; default interest; and penalties.

Following this complaint, the U.S. dollar continues to slide and gold reaches an all time trading high.  And so the battle continues.