Metro Seeks Bank Restraining Order

Bank demanding $43 million

102708 Metro Security D.C.
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The Washington area's transit agency is seeking a temporary restraining order against a Belgian bank that is demanding a $43 million payment by Friday.

KBC Group is requesting the money following the collapse of insurance giant American International Group, which had guaranteed a financing deal the bank made with Metro in 2002.

But AIG's financial problems have triggered a clause that allows the bank to demand the money all at once.

Metro warns that if a federal judge refuses to grant a temporary restraining order, the transit system could find itself in default by Friday.

Besides Metro, the collapse of AIG could force about 30 other agencies to repay investors billions of dollars for financing deals that AIG had guaranteed.

Lawmakers have written to Treasury Secretary Henry Paulson in recent days, urging the government step in to back the deals instead of AIG.

Copyright AP - Associated Press
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