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Gramercy Seeking $1.3 Billion From Peru Over Land-Bond Dispute

  • U.S. hedge fund gives notice of intent to seek arbitration
  • Gramercy says Peru violating terms of U.S. free-trade accord

Gramercy Funds Management LLC said it’s owed $1.3 billion from Peru’s government for decades-old defaulted bonds.

The hedge fund filed a notice of intent to seek arbitration under the U.S.-Peru Free Trade Agreement unless it reaches an “amicable resolution,” according to an e-mailed copy of the document from the Greenwich, Connecticut-based company’s outside public relations firm. Gramercy said it began purchasing defaulted land bonds in 2006 and now holds 10,000 individual notes. It is claiming more than $1.3 billion in damages.