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. Last Updated: 07/27/2016

Western Banks Drop Bond Lawsuit

The banks Lehman Brothers and Indosuez have dropped their legal complaints against Russia, having reached a deal with the government, officials said Thursday.

On Aug. 26, Lehman Brothers and Indosuez initiated legal action demanding early redemption of hard-currency-denominated MinFin bonds after Russia defaulted on its domestic debt Aug. 17.

On Thursday, Interfax quoted Finance Minister Mikhail Zadornov as saying that the state had persuaded the banks to drop the lawsuits in September.

Richard Creswell, a spokesman for Lehman Brothers in London, confirmed that the bank had withdrawn its claims but would not elaborate.

Indosuez representatives could not be reached for comment Thursday.

Lehman Brothers was one of the first Western institutions to take issue with Russia's faltering financial system. In September, the bank had frozen the British accounts of Russia's Inkombank, SBS-Agro and Uneximbank in efforts to get payments on due forward contracts.