Lawsuit filed over Mamtek controversy

Mar 22, 2012

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."