Czech town faces massive claim for 1924 bonds

AP News
Posted: Oct 19, 2011 11:35 AM
Czech town faces massive claim for 1924 bonds

An American lawyer is demanding that a Czech town pay $506 million to holders of bonds it issued nearly 90 years ago, and the nation's government is assessing the request.

Attorney Ed Fagan claims that Karlovy Vary, a spa town, issued the bonds in 1924, that they matured in 1954, but were never paid.

Town spokesman Jan Kopal said Wednesday that Karlovy Vary is a different legal entity today than it was in 1924 and, "We don't feel any responsibility."

Mayor Petr Kulhanek canceled a meeting with Fagan that was planned on Thursday.

Meanwhile, the Czech Finance Ministry took over the case and said it is studying it.

The claimants were not identified.