Concerns stemming from the "isolated" meeting with international creditors early last month regarding Lebanon's inability to restructure on clear terms are beginning to manifest in heightened legal actions. It has been revealed that the international funds and companies holding nearly $20 billion in Eurobond securities have hired an international law firm to sue the state and protect their rights. It is expected that they will seek to seize Lebanon’s gold located in the United States, which constitutes one-third of the gold reserves valued at approximately $5.6 billion.
Among the non-local creditors are investment funds, insurance companies, and foreign banks, led by "BlackRock," "Ashmore," "Amundi," in addition to JPMorgan and insurance companies like Alliance Bernstein, MetLife, Pictet Funds, and others. These "vulture" funds, which previously did not hold a majority before 2019, giving them a position of power in negotiations and lawsuits, now control a significant portion due to the Lebanese banks' decision to liquidate these bonds at the outset of the crisis, increasing their size and role simultaneously.
Today, despite the "legal debate regarding the possibility of seizing the gold since it does not belong to the state but to the Central Bank of Lebanon," these companies will file lawsuits, according to economist and banking expert Michel Qazah. He points out that "Lebanon's defense will be weak as the final owner of this gold is the state, and it is unlikely that the Central Bank will be authorized to handle it by law, especially as matters are moving towards alleviating responsibilities and tasks from the latter." Qazah believes "it would have been better to transfer the gold reserves to Lebanon before announcing the default in March 2020, but this did not occur due to negligence and the failure to prioritize serious solutions in favor of personal deals and interests, leaving the door open to all possibilities."
