NEW YORK, Oct 17 (Reuters) - UBS AG sued Croatia in New York federal court on Friday, claiming the republic owes it $45 million in principal and interest on defaulted debt assumed after the breakup of Yugoslavia.
According to the lawsuit, Yugoslavia issued the debt in 1988 as part of a series of restructurings, as the country tried to keep its struggling economy afloat. It said the terms of the notes in question call for any legal action to be filed in New York.
Yugoslavia broke up in the early 1990s amid years of civil war. In 2001, the country’s remaining external debt was divvied up among Croatia and the other successor states to Yugoslavia: Bosnia and Herzegovina, Macedonia, Slovenia, Montenegro and Serbia, according to the lawsuit.
The other countries fulfilled their debt obligations to UBS, the lawsuit said, leaving only Croatia in default.
Croatia and UBS have negotiated for years over the debt payments but have not come to a resolution, even though Croatia has acknowledged its obligations, the lawsuit said.
“Despite all of this, Croatia has not paid its long overdue debt to UBS, leaving UBS with no choice but to commence this lawsuit,” the complaint said.
A spokesman for Croatia’s embassy in Washington, D.C. did not immediately comment on the lawsuit.
The case is UBS AG v. The Republic of Croatia, U.S. District Court, Southern District of New York, No. 14-8316. (Reporting by Joseph Ax; Editing by David Gregorio)