(Bloomberg) — Grantham, Mayo, Van Otterloo LLC, a Boston-based money manager, dismissed its lawsuit against Ecuador over debt the nation defaulted on six years ago.
The parties agreed to dismiss the suit filed in December in Manhattan federal court, agreeing that each side would pay its own costs and that the complaint wouldn’t be refiled, without disclosing other terms, according to a March 23 court filing.
GMO said in its complaint that it owned Ecuador sovereign notes due 2030 with a face value of $15.9 million. President Rafael Correa defaulted on $3.2 billion in bonds in late 2008 and early 2009, declaring the debts illegal and illegitimate. The government then repurchased most of the securities at about 35 cents on the dollar.
The government told potential investors in new notes sold on March 19 that the lawsuit represented a “risk of disruption to the offering,” according to a prospectus obtained by Bloomberg News.
Robert G. Jones, a lawyer for GMO, declined to comment on the settlement. Andrew Z. Schwartz, who represents Ecuador, didn’t immediately return a voicemail message.
GMO directed questions to Hewes Communications Inc., an external media-relations service provider. The company declined to comment. Ecuador’s Finance Ministry didn’t immediately reply to telephone messages seeking comment.
The case is GMO Trust v. The Republic of Ecuador, 14-cv-09844, U.S. District Court, Southern District of New York (Manhattan).