Deutsche Bank Sues Urbi in NY for $61 Million Over Loans

Deutsche Bank AG (DBK) sued Urbi (URBI*) Desarrollos Urbanos SAB de CV, a Mexican real-estate developer, in New York for $61.1 million for defaulting on loans.

Deutsche Bank made loans valued at $50 million and $55 million to Mexicali-based Urbi, according to a complaint filed yesterday in New York State Supreme Court in Manhattan. In April, Urbi failed to make a $3 million payment on the $55 million loan and also failed to pay $1.55 million in interest on the two loans, Deutsche Bank said.

The bank also said that because of the default it terminated a swap agreement with Urbi involving interest-rate and foreign-exchange option transactions. Frankfurt-based Deutsche Bank said in the complaint that it told Urbi it owed $37.7 million on that agreement and claimed the payment hasn’t been made.

Foreclosures in Mexico more than doubled last year to a record 43,853. Urbi’s cash and cash equivalents fell 95 percent in the first quarter from the previous quarter. The company has hired Rothschild to advise it on a possible restructuring.

Urbi, the biggest Mexican builder by the number of homes, was sued in New York last month by Credit Suisse Group AG and Barclays Plc, Britain’s second-biggest lender, over financial derivatives.

Deutsche Bank also sued the guarantors of the loans and seeks damages of $46.8 million from them.

The case is Deutsche Bank v. Urbi Desarrollos Urbanos, 651676/2013, Supreme Court of the State of New York, New York County (Manhattan).

To contact the reporter on this story: Don Jeffrey in New York State Supreme Court in Manhattan at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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