Shinsei Bank said Tuesday it filed a damages suit against Deposit Insurance Corp. of Japan seeking 13.4 billion yen for losses incurred as a result of a long-standing dispute with a bankrupt real estate developer.
The suit, filed with the Tokyo District Court, pertains to losses incurred by the bank in the form of legal costs and other expenditures stemming from lawsuits it engaged in with EIE International Corp. and its former executives.
Shinsei is the successor of the Long-Term Credit Bank of Japan, which was put under government control in October 1998 due to massive nonperforming loans.
In March 2003, the government sold LTCB to New LTCB Partners CV, an international consortium led by Ripplewood Holdings LLC of the U.S.
Shinsei said the latest legal action is based on an agreement signed in February 2000 by LTCB, government-backed DIC and New LTCB Partners CV.
Under the agreement, Shinsei has litigation-related indemnities by DIC, including a general indemnity for costs incurred in legal proceedings related to matters arising before March 1, 2000, according to a Shinsei spokesman.
Shinsei agreed to settle a legal dispute with EIE International in May 2004 over sales of overseas resort properties by the bank's failed predecessor and paid 21.8 billion yen to the administrator of the now defunct real estate developer the following month.
Last December, Shinsei asked DIC to pay 13.4 billion yen to cover part of the settlement cost in line with the agreement.
But DIC notified Shinsei in April of its intention to reject the plea, leading the bank to resort to the latest lawsuit.