The Bank of Portugal has stuck to a decision to keep a loan linked to Goldman Sachs in a 'bad bank' carved out after the rescue of Banco Espirito Santo (BES), putting the central bank and Goldman on course for a legal battle.
The Daily Telegraph reports that the central bank said any remaining doubts could only be clarified in court. Goldman responded that it intended "to pursue all appropriate legal remedies without delay".
The Wall Street firm and some of its clients lent BES $835m in July last year using an entity it created called Oak Finance Luxembourg SA.
The Bank of Portugal rescued BES with a €4.9bn ($5.6bn) package in August, carving out a working bank, Novo Banco, and a legacy entity that kept the exposure to debts of the bank's founding Espirito Santo family and is being wound down. BES shareholders were left with the 'bad bank'.
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