A STANDSTILL DEBT MOVE
As one expected, the German Standstill Debt Agreement has been renewed for another year without any substantial modification of the existing basis. True, there is a little extra inducement to creditors who will grant new accommo- dation, but I scarcely think London banks and acceptance houses will rise to this bait. Meantime, they will certainly welcome the formation of Continental Assets Realisation Trust, a new company, with a practical board, which will take over standstill claims from creditors with a view to gradual realisation in free currencies. Those who turn over their claims will receive shares in the Trust, and it is hoped that at a later stage these shares will be marketable on the Stock Exchange. It would then be open for the banks and acceptance houses who had taken up the Trust's capital to cash out of their Standstill claims, though doubtless at considerable sacrifice.
In theory the Trust is wisely conceived, and I am not surprised that it has the blessing of the Bank of England. As a holder of substantial lines of claims it will obviously be better placed to negotiate settlements than the separate creditors and it has a board which knows the ropes. Its job will, of course, be complicated in that the ultimate goal is not merely the sale of Standstill claims, but the translation of the proceeds into free currencies. This is a process which is bound to take time and to call for a good deal of negotiating skill.
Previous page
