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First, Davidson Kempner Capital Management turned up the heat in its legal dispute with one of India's wealthiest families by seizing a private jet. Now, the New York hedge fund has set its sights on something else many billionaires can't live withouta luxury yacht.
Davidson Kempner affiliate Midtown Acquisitions is trying to force Essar Global Fund Ltd, an investment vehicle controlled by India's Ruia family, to pay $200 million from a New York legal ruling. At a London hearing Tuesday, lawyers for the hedge fund questioned Nigel Bell, a director at Essar Global, about its assets.
The hearing took place under an English court procedure that allows creditors to get information that could help them enforce a ruling against a debtor's assets. The latest stage of the escalating dispute threatens to spill out of the courtroom and into the lives of a prominent Indian family.
Debt-laden Essar Group, controlled by billionaire brothers Shashikant and Ravikant Ruia, has sought to restructure loans and sell assets to ease pressure from lending banks. In August, Essar sold its Indian oil-refining business to a group including Rosneft PJSC and Trafigura Group for $12.9 billion, helping the company cut its debts by about $11 billion.
The London case dates to September 2014, when Midtown, along with Barclays Plc, Credit Suisse Group AG and Goldman Sachs Group Inc's special situations group, agreed to provide a secured term loan facility of as much as $450 million to Essar Steel Minnesota, according to London court documents filed by Midtown in February.
Essar Global Fund guaranteed the debt, which wasn't repaid in full. In August 2016, a New York judge ruled in favour of the creditors, saying Essar owed $172 million plus interest. Midtown took over the claim and is leading global recovery efforts.