The demand would be because of the default bond debt of Ecuador in 2008, when the President of Ecuador, Rafael Correa, stated that Ecuador’s external debt was “illegal” and “immoral” and refused to pay interests for $ 30, 6,000,000 of the 2012 Global bonds, which totaled USD 3200 billion of bonds in foreign currency, making the country fall into “default.”
In 2009, Ecuador bought back most of these foreign bonds with cash and with a discount (35% of its nominal value), negotiation that was described as successful by the Ecuadorian government.
At that time, Correa said he was willing to take full responsibility for that decision, which might imply any claims of creditors.
GMO Trust is part of the defalut bonds worth USD 15.9 million, says Forbes.
The demanad by GMO point out that Ecuador defalut of 2008 was not product of an economic crisis. “Tellingly, despite the purported immorality and illegality of its entire stock of debt, Ecuador continued to pay on its remaining issuances aside from the $3.2 billion in defaulted 2030 and 2012 bonds,” is said.
GMO added, according to Forbes, that “Ecuador has made no attempts to deny or justify its default.”