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Thu March 22, 2012
Lawsuit filed over Mamtek controversy
Columbia-based Shelter Insurance has sued a bond underwriter for $390 million over municipal bonds issued by the city of Moberly for the failed Mamtek USA sweetener plant project.
The Columbia Daily Tribune reports that Shelter sued Memphis-based firm Morgan Keegan in Cole County Circuit Court, saying the company did not perform adequate due diligence when it underwrote $39 million in municipal bonds for the project.
The insurance company purchased about $5.6 million of those bonds in 2010.
Shelter says the underwriter repeated false claims from Mamtek about its financial prospects. The bonds came with a promise that Moberly would use revenue from the Mamtek project to make payments on the debt.
In a statement, Morgan Keegan said the claims made by Shelter in the lawsuit have "absolutely no merit."