Tag Archive for: claims

havana-live- Cubana  HAVANA, Jan. 6th  The Cuban government is considering different ways to bypass the potential expropriation of its aircraft, which the U.S. could impound on American soil as payment for billions of dollars in unpaid U.S. terrorism judgments against Cuba, a State Department official told Bloomberg BNA.

Meanwhile, several Miami attorneys who won multi-million dollar terrorism judgments for their clients against Cuba are watching how a civil aviation arrangement plays out between the U.S. and Cuba, in case there’s an opportunity to collect.

The Cuban government has shown interest in a code-share agreement with U.S. airlines so that American, not Cuban, planes land in the U.S., the State Department official said. The official spoke on the condition of anonymity under State Department ground rules for reporters.

Another option the Cubans are weighing is leasing airplanes from the U.S. or a third country to fly routes between Cuba and the U.S. All of the choices would give Cuba an opportunity to use more modern aircraft while protecting their own from seizure. The Cuban government owns the airlines based on the communist island, so if its airplanes land in the U.S., they may be confiscated for the balance of about $2 billion in unpaid judgments.

“The Cuban government is very well aware of that risk,” the State Department official told Bloomberg BNA.

The U.S. announced an informal civil aviation arrangement with Cuba in December to govern regularly scheduled flights and charter service between the two countries in the absence of a formal agreement. Both sides are expected to sign off on the arrangement in early 2016 (243 ITD, 12/18/15).

As the Cuban government figures out how to enter the U.S. market, Cuban air service to the U.S. is not scheduled for departure anytime soon, the State Department official said. Airlines interested in flying routes on Cuba’s behalf to the U.S. would have to secure licenses from the U.S. Commerce and Treasury departments, as well as authorization from the U.S. Department of Transportation, the State Department official said.

“We told the Cubans we were prepared to give positive consideration to such license applications,” the official told Bloomberg BNA.

Scheduled service from the U.S. to Cuba in American aircraft is expected to commence in the first half of 2016, after the Department of Transportation divvies up the Havana slots to U.S. airlines. Currently, there would be a maximum of 20 slots available.

“This is a completely new destination and origin, or at least it’s new for this generation of Americans,” Transportation Secretary Anthony Foxx told reporters. “And so we’re going to work through it as quickly as we can.”

Behavior Going Back to 1959

Frozen Cuban assets in the U.S. have satisfied some of the judgment awards, but most of the balance remains uncollected while creditors sweep the U.S. for Cuban assets. A federal antiterrorism law lets the families of state-sponsored terrorism victims seek damages in U.S. courts. Total compensatory damages for the 11 judgments exceed $2.1 billion, while punitive damages account for nearly $1.8 billion.

Foreign governments are not required to pay punitive damages, Alfonso Perez, an attorney who in 2006 helped secured a $400 million judgment against Cuba for clients, said.

U.S. state and federal courts imposed the judgments against the Cuban government when it was labeled a state sponsor of international terrorism. The State Department placed Cuba on the terrorism blacklist in 1982, and, following a review, Secretary of State John Kerry scrubbed Cuba from the list last May.

Eight judgments seek compensation for executions, torture and other behavior that occurred prior to Cuba’s inclusion on the terrorism list. For example, Perez was one of the attorneys who represented the family of Robert Fuller, a U.S. plantation owner in Cuba. Fuller was tortured and executed in 1960. Other judgments are tied to the torture and execution of political dissidents and other U.S. citizens.

The U.S. discussed the judgments and other claims in a preliminary meeting with the Cuban government in December 2015. Both sides will reconvene for the next round of talks in the first quarter of 2016. In addition to the roughly $2 billion in judgments the U.S. is seeking, it also wants Cuba to compensate U.S. citizens for 5,913 certified claims over property and assets the Cuban government seized shortly after Fidel Castro took power.

Without interest, the certified claims total $1.9 billion. Cuban officials have countered that the U.S. owes Cuba more than $100 billion in reparations for human and economic damages they say the country suffered under the U.S. embargo.

‘Ear to the Ground.’

Attorney Arturo Hernandez represented Ana Margarita Martinez, a Miami woman who in 2001 won a $27.1 million judgment against the Cuban government, because her husband at the time, Juan Pablo Roque, was a Cuban double agent who once worked for the FBI.
She recovered $198,000 in exchange for waiving her right to collect $20 million in punitive damages. With 6 percent interest in the remaining $7.1 million, Hernandez said the Cuban government actually owes his client $14 million.

“I do believe that there are going to be, I think, opportunities presented in the future to be able to collect on these judgments based either on seizing Cuban property in the United States, whether that be funds or whether that be airlines, because we are a judgment creditor of the government of Cuba,” Hernandez told Bloomberg BNA Dec. 21. “We certainly have our ear to the ground with respect to these issues.”

Attorney Jorge Borron won a $253 million judgment for the family of Rafael del Pino Siero in 2008. Del Pino was an ex-friend of Castro who was imprisoned in Cuba shortly after Castro took over. Borron alleged that the Cuban government in the late 1970s tortured and hanged del Pino in his cell.

Airplanes aren’t Cuba’s only assets, but Borron, who has yet to collect on the judgment, is frustrated the Cuban government is looking for ways to protect their aircraft from the judgments. He said he is disappointed that the U.S. appears to be “bending over backwards” to help Cuba.

“That’s going to create a lot of backlash with many, many individuals objecting to this,” Borron said.

Perez isn’t surprised the Cuban government is trying to protect its assets. He said the larger issue is the absence of a process to resolve the judgments.

“I think the country, the Congress, the White House, who has shown tremendous leadership in this area, should really push to have a mechanism for resolving these claims,” Perez told Bloomberg BNA.


how-a-startup-with-no-revenue-can-be-worth-a-billion-dollarsHAVANA, Dec.8th (REUTERS) Cuban and U.S. officials on Tuesday will begin to untangle one of the most complex obstacles to normalization of relations between the two countries: the claims of Americans whose property was nationalized after the 1959 revolution and Cuban counterclaims for damages caused by the U.S. trade embargo.

The talks in Havana are the latest in a series of bilateral meetings since the two former Cold War adversaries restored diplomatic ties in July this year.

Some 5,913 U.S. corporations and individuals have been awarded $1.9 billion worth of claims for factories, farms, homes and other assets that were nationalized in Cuba after Fidel Castro’s rebels came to power on Jan. 1, 1959.

Those claims, registered with the U.S. Justice Department’s Foreign Claims Settlement Commission, are now worth roughly $8 billion when including 6.0 percent annual interest.

Cuban law ties the settlement of the claims to U.S. reparations for damages resulting from the embargo and other acts of U.S. aggression against Cuba. Cuban estimates of that damage range from $121 billion to more than $300 billion.

Neither side is eager to pay the full value, setting up a negotiation.

“The meeting is the first step in what we expect to be a long and complex process, but the United States views the resolution of outstanding claims as a top priority for normalization,” the U.S. State Department said in a statement on Monday.

Cuba nationalized all foreign businesses and reached settlements with owners from other countries. The government recognizes the U.S. claims but it cut off negotiations in response to the decision by former President Dwight Eisenhower to suspend Cuba’s sugar quota in 1960.

The claims sat dormant for half a century as a result of the U.S.-Cuba estrangement, which ended a year a ago when U.S. President Barack Obama and Cuban President Raul Castro announced detente.

Many of the nationalized companies no longer exist and individual claims have been passed to heirs.

The largest claim, by the Cuban Electric Company for more than $267 million, has changed hands several times due to mergers and acquisitions and is held by Office Depot, itself a takeover target of Staples Inc pending antitrust review.

With interest that claim is now worth more than $1 billion.

Other major claimants include Starwood Hotels, Coca-Cola, the former International Telephone & Telegraph Co., now ITT Corp, and various oil, sugar and financial interests.


IMAGES SECTIONS-17HAVANA, Dec.5th  (New York Times) Representatives of Cuba and the United States will meet on Tuesday in Havana to begin negotiations on settling decades-old outstanding property claims for the thousands of American citizens and companies whose assets were confiscated after Cuba’s revolution, according to several people briefed on the coming talks.

The meeting is considered a major step because the United States’ trade embargo against Cuba was initially enacted after Fidel Castro, the Cuban leader at the time, expropriated land from American companies. Nearly 6,000 people and corporations lost homes, farms, factories, sugar mills and other properties totaling $1.9 billion.
Now, for the first time, Cuba has agreed to meet to consider settling those losses. The State Department is expected to announce the meeting on Monday. A Cuban Embassy spokeswoman declined to comment.

“This meeting is an enormously big deal,” said Mauricio J. Tamargo, the former chairman of the Foreign Claims Settlement Commission, an agency within the Justice Department that adjudicates claims against foreign governments.
“The Cubans have up till now never recognized these claims as legitimate or something they are even prepared to discuss. It has never happened in 56 years since the revolution began and they started confiscating American property.”

When Mr. Castro declared victory in 1959, many Americans were forced to flee their homes and give up their land. His government later started expropriating large companies, and eventually nearly 900 corporations filed claims.

The list of claimants includes Exxon, Texaco, Coca-Cola and Starwood Resorts. About half the value of the claims, now estimated at up to $8 billion, belong to just 10 companies.

The issue had long been a stumbling block to the re-establishment of relations between the United States and Cuba. But the Obama administration restored diplomatic relations last year, with the vague assurance that property claims would be on the long list of issues to be taken up in bilateral talks.

Cuba would be unlikely to accept any deal that did not include lifting the trade embargo, which has for years been the nation’s top priority, said Mr. Tamargo, a lawyer with the firm Poblete Tamargo, which represents people with claims. If the embargo is lifted, he added, the Cubans could pay off the settlements with the increased trade revenues.

The Cuban government has estimated that the American embargo cost Cuba about $121 billion in losses.

“If American properties are compensated, then the embargo should be lifted,” Mr. Tamargo said. “There is a window of opportunity for Cubans that will be gone in about a year.”

“Obama is a very good negotiating partner for them to have as opposed to President Trump or President Bush or even President Hillary,” he added, referring to Donald J. Trump, Jeb Bush or Hillary Clinton.

The talks would not include the thousands of claims of Cuban-Americans who lost property before they became American citizens, like Mr. Tamargo’s family, who lost a 3,500-acre farm.

Although many people assume that Cuba does not have the money to pay off settlements, it could pay claims by offering American corporations with outstanding claims a first shot at the Cuban market, said Richard E. Feinberg, whose Brookings Institution study on the issue will be released Tuesday.

If the payments were spread out over 10 years, Cuba probably has the money to pay the original claims, but perhaps not the 6 percent interest levied by the claims commission, Mr. Feinberg said.

“It’s a historic moment, if you consider that U.S.-Cuban relations collapsed in the early ’60s in large measure when Fidel Castro moved to expropriate the large U.S. holdings there,” he said. “Now 55 years later, the two sides are sitting down to say, how do we settle this?”

One person with a pending claim, Margery Leeder, 85, a retired real estate agent in Pompano Beach, Fla., said she never thought her family would be compensated after the Cuban government seized 72,000 acres of rice and sugar her father owned outside Havana.

“If you think about it, the Castro brothers have done the biggest heist in history,” Mrs. Leeder said.

Her father’s land was worth $3.9 million in 1959, and the family’s claim is now valued at $16 million.

“Overnight if you were American and had a bank account, it was closed; you had no money,” she said. “Eventually Castro did allow you to get some money, only about $1,000. Castro said nobody needed more than that.”