Peru Faces Old Debt from Bonds Issued to US Guano Company Now Worth Millions
Peru is seeing a very old debt resurface.
The country issued 14 bonds to a U.S. guano consignment company almost 150 years ago in 1875 to pay off a debt. Now, an Illinois firm wants to cash in the money.
The bonds were passed on to an Illinois film, which now wants to cash all the 14 bonds, each valued at $1,000, along with 7 percent interest per year, payable in "United States Gold coin," according to Bloomberg News.
The Illinois firm MMA Consultants 1 Inc. filed a complaint in federal court in New York Thursday regarding the bonds.
Each bond has the signature of Don Manuel Freyre, who is described as the "Envoy Extraordinaire and Minister Plenipotentiary of Peru," according to the complaint. However, Freyre has been dead for over a century, having served as Peru's ambassador between 1869 and 1877.
MMA has tried to contact the Peruvian government regarding the bonds three separate times, but have not been able to receive a response. The company is suing for breach of contract. It is not revealed in the lawsuit how MMA came by the bonds.
Guano, which are bird droppings, were an important fertilizer that Peru had large quantities of in the 1800s. By the 1870s, there was much less guano to extract, Court House News reports.
"In 1875, Peru issued a series of bonds pursuant to a contract with certain consignees of guano, the Guano Consignment Company in the United States of America, in order to refinance its debt to those consignees," the lawsuit states. Each bond promised to honor all terms.
"Know all men by these presents, that I the undersigned Envoy Extraordinaire and Minister Plenipotentiary of Peru in Washington have been instructed and specially authorized to pledge, and do hereby pledge, the National Faith of Peru towards the faithful performance and observance of the conditions under which this Certificate has been issued as set forth above," each bond said, according to the complaint.
After all of the interest accumulated over past century, each bond would be worth about $3 million each, making the total debt owed by Peru at almost $182 million.
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