Russia Vows to Defend Rights as Czarist Creditors Seek Lawsuit

Hat tip: M.C.   By Helene Fouquet and Lyubov Pronina

Feb. 9 (Bloomberg) — The Russian government vowed to “defend our rights” after French holders of czarist bonds valued at as much as 100 billion euros ($137 billion) threatened to sue the Kremlin and seize property it owns in Paris.

“May God help them,” Viktor Khrekov, a spokesman for the Kremlin Property Department, said by phone today from Moscow, after the Paris-based International Federative Association for Russian Bond Holders, or AFIPER, pledged to sue to recoup part of the century-old debt.

“We have experience defending our property abroad,” said Khrekov. “Russia and France settled this debt a long time ago, so if they are planning to sue they will also have to deal with the French government. But they’re welcome to file a lawsuit; we will defend our rights.”

AFIPER’s announcement yesterday came after the French Budget Ministry said Russia had purchased the Meteo France building near the Eiffel Tower in Paris for an undisclosed sum.

France was a key market for Russian bonds before the 1917 Bolshevik Revolution, with royalty to workers buying them for savings. Holders of czarist debt have clamored for a better deal since 1996, when Russia made a $400 million payment that France said “definitively” settled debt incurred to it before 1945.