1987-139 - Laserfiche WebLink

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40 Litigation The Bank and 22 other banks were named as defendants in two lawsuits eawrenced in the United States District Court in Dallas, Texas by Placid oil Carpany ("Placidse third Drilrges of the debtsCCMpdny Placid and Penrod rod7), and the to the defendants and clat brothers. The actim d sage , including U.S. $13.8 billion. The claim damages, inclu�9 treble damages, aggregating Bank's 3.56 per cent participation in the syndicated hire -year tern loan to Placid tas made in 1983 and has been reduced from U.S. $44,463,510 to a present balance of U.S. $25,424,911. The Bank is defending these claims, denying liability. It is the opinion of the Bank that the ultinmte disposition of these actions will not have a material adverse effect on the financial condition of the Bank. Recent DeveloAtent Dare Petrolaun In April 1986, Dane Petroleum Limited ("Dune Petroleum") signed an interim agreement with lenders whereby it would defer interest and principal payments to most of its unsecured lenders until October 29, 1986. This agreement was subsequently extended to June 30, 1987 with no payments to unsecured lenders except in certain events related to increased oil and aprices. Under crash flew the extended agreement, secured lenders will receive payms a Y frau the respective assets securing their loans. Although the extended agreement has expired, Date Petrolaan continues to meet the provisions of that agreement. Since May 1, 1986, Dcme Petroleum has been unable to meet in full itstereesst me paynts and principal repayments to lenders because of the collapse in energY prices. The Bank has CN$588 million of secured loans and CN$1O7 million of unsecured loans which are affected by the agreement. Tnese loans were placed in ren -accrual status at April 30, 1986 in the rec=ognition that at prevailing oil and gas price levels, the catpany will have insufficient cash flow to fully service these loans. Dome Petroleum has made certain proposals regarding principal refinar>ring and repayment deferral which are being studied by its lenders. Amoco Cannata Petroleum ampany Ltd. has presented a proposal to purchase Dare Petroleum, but to date the proposal has not been well received by the Bank and most other major lenders. The Dane Petroleum situation is not expected to be resolved during the current calendar year. Due to the continued unpredictability of energy prices, in fiscal 1986 the Bank allocated CN$278 million against its total exposure of approximately ai$1.9 billion in energy related loans Where the ability to service the debt is directly related to changes in oil and gas prices. Brazil In February, 1987, the Goverment of Brazil announced it weuld suspend interest payments on the country's medium and long term foreign currency debt pending the outcome of negotiations with foreign banks regarding the further restructuring of the debt. During the second quarter, all of the Bank's medium and long term outstanding loans to Brazil, amounting to 0:1$836 million, were classified as non accrual. Negotiations with creditors have been scheduled and the Bank is hopeful that overdue interest on its Brazilian loans will be paid arra the loans returned to accrual sTatirs in fiscal 1988. A-9