Controversial US legal eagle Edward D. Fagan has created more than a ripple in the Czech Republic’s biggest spa resort — by threatening to sue the city council for around Kč 10 billion in unredeemed bonds more than 80 years old.
Fagan, who became famous in the Czech Republic for his intervention more than a decade ago aimed at helping anti-nuclear protesters block the construction of the Temelín nuclear power plant, dropped his bombshell claim in the last days.
The maverick lawyer once attempted to file a $50 billion class action lawsuit against Swiss UBS and Credit Suisse and US based Citicorp Inc. for providing funds to the South African apartheid government — and helped win a $1.25 billion lawsuit against Swiss banks that had refused to repay money that belonged to Holocaust victims.
Most recently, Fagan made headlines for initiating legal proceedings against the makers of British comedian Sacha Baron Cohen’s film “Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan” on behalf of two Romanian villagers, suing (unsuccessfully) for alleged human rights violations.
The famous US litigator — who was reportedly disbarred in New York and New Jersey for failing to pay court fines and fees and for stealing client money and escrow trust funds from Holocaust survivors — now says he is representing the holders of bonds issued in 1924 by the city of Carlsbad, the German name for Karlovy Vary, which were due to be redeemed after 30 years in 1954 but were never paid.
Fagan argues, according to Karlovy Vary city council spokesman Jan Kopál, that the bonds real worth in today’s terms is around $506 million. Copies of the claim, according to the Czech news server Novinky.Cz have also been filed with the Czech National Bank (ČNB) and Finance Minister Miroslav Kalousek (TOP 09).
Historians in the West Bohemian spa city say they are puzzled by Fagan’s claim, being unable to find records of a large bond issue around 1924.
Historians in the West Bohemian spa city say they are puzzled by Fagan’s claim, being unable to find records of a large bond issue around 1924 or any reason at that time to raise large sums. They concede, however, that the city often ran substantial debts at the time. The ČNB has, however, confirmed the existence of the bond issue.
The Ministry of Finance has said the circumstances of the issue and all the documents relating to it have to be carefully studied before anything approaching an opinion on whether the bond claim might be valid or not could be ventured.
Karlovy Vary mayor Petr Kulhánek (Karlovy Vary Citizens’ Alternative, KOA) told the website he is convinced that the city will not face a Kč 10 billion bill — which would be the council’s budget for around 10 years or the worth of its entire municipal assets — since the city as it was in 1924 and currently are far removed and different legal entities. Ed Fagan can be expected to contest that point.
Karlovy Vary, or Carlsbad as it was known in German, was part of the German-speaking Sudetenland until the end of WWII when the population was forced to flee or expelled by the Czechoslovak government.
