(GIN) – So-called “vulture funds” that took over a Chemical Bank loan to Liberia now stand to recoup $20 million from the struggling West African nation. The original loan, which dates back to 1978, was for $15 million.
 
The two funds, registered in the Caribbean, had asked London's High Court to grant summary judgement in the case - making Liberia liable for the debt without a full hearing. The court ruled in their favor and ordered payment to Hamsah Investments and Wall Capital Ltd. of the amount of the loan plus accumulated interest.
 
Twenty million dollars is equal to 105% of the country's education budget and 155% of its health budget in 2008. Liberia accused the firms of profiting from poverty.
 
“We are unable to repay this loan as it will amount to a violation of the Highly Indebted Poor Countries Initiative, which Liberia is going through for a debt waiver,” Finance Minister Augustine Ngafuan told reporters in the capital city. "Our lawyers are going to work tooth and nail to battle this."
 
Vulture funds buy bonds that have been defaulted on at low prices when a country is in economic difficulty and then litigate until they recoup the debt’s full value. Most recently vulture funds won a monetary settlement from the Republic of Congo.
 
Meanwhile, a campaign to stop “vulture funds” from preying on struggling countries has been launched by the U.S.-based AfricaAction, TransAfrica Forum and Jubilee USA, and a Stop VULTURE Funds Act (HR 2932), is in the House of Representatives.