A federal judge in New York City has delayed legal proceedings aimed at seizing more than $1 billion of frozen Iranian assets because the State Department warned that the actions could prejudice efforts to free the U.S. hostages in Tehran.
U.S. District Court Judge Kevin T. Duffy also ordered, at the government's request, that all briefs, affidavits and papers relating to 48 suits filed there be sealed from public view and held in his chambers.
The State Department, in asking for a 30-day delay and for the closing of the records, declared that "efforts to secure the release of the hostages in Tehran are at a very delicate stage."
"Under the circumstances," State Department legal adviser Robert Owen wrote, "the department has reason to believe that the content of the briefs to be filed in this action raise the possibility that their filing will prejudice efforts being made with respect to the hostage crisis."
In the pending lawsuits, U.S. banks and corporations are attempting to cover defaulted loans, debts and assets left in Iran with frozen Iranian government funds now held in U.S. banks.
Involved are major U.S. banks such as Chase Manhattan and Citibank; corporations such as E. I. duPont deNemours, Lockheed and American, Telephone and Telegraph, and major oil drilling concerns such as Sedco Corp., and Reading & Bates.
One American company claiming debts from Iran has allowed its suit to lapse, an act that U.S. government officials in Washington yesterday said they hoped may become a pattern with other claimants.
American Express International Banking Corp., which had filed against the Iranian government last December for $50,064,166 in outstanding loans to that country, has decided not to press its claim.
Company officials refuse to comment on their action. But a New York lawyer involved in the Iranian asset cases said yesterday he believed the company had filed its claims when other banks had declared their Iranian loans in default and it feared it would never be repaid. Now the company appears willing to gamble that the Iranian revolutionary regime will pay its debts.
On Thursday, the governor of Iran's central bank, Ali Reza Nobari, told The Washington Post in a telephone interview from Tehran that unfreezing the $6 billion in Iranian gold and dollar deposits in U.S. banks and branches was one of the conditions involved in release of the U.S. hostages
Yesterday Nobari told Reuter in Tehran that "the hostages are a political matter and are not linked" to the assets freeze.
Officials at the State Department described the assets issue yesterday as a "side track" linked only indirectly to the hostage release plan now under negotiation.
United Nations sources indicated that negotiations to unfreeze the Iranian assets are part of a separate U.S.-Iranian understanding that is being undertaken as part of a return to some normal bilateral relations between the two nations.
These sources said resolution of the asset issue was not a precondition to naming of the commission that will look into Shah Mohammad Reza Pahlavi's alleged crimes.
THE U.S. government's effort to settle the freeze problems is being coordinated by a Treasury Department special task force headed by Deputy Secretary Robert Carswell.
The freeze was ordered by President Carter on Nov. 14, 10 days after Iranian militants seized 63 hostages at the U.S. Embassy in Tehran.
Carter acted after then Foreign Minister and now President Abol Hassan Bani-Sadr said that the Iranian government would be justified in withdrawing its funds from American banks.
Chase then declared a $500 million Iranian government loan in default, a controversial action that set off a chain of other loan default declarations. That in turn created a rush into U.S. courts by banks and companies seeking to prevent huge losses that could result from the failure of Iran to meet its financial obligations.
The largest single group seeking to tie up Iranian assets are the U.S. banks that followed Chase's lead and declare their own loans to Iran in default.
Chase itself is seeking $366 million to cover outstanding loans to the government and government businesses. Citibank has filed for $118 million and Manufacturers Hanover Trust Co. seeks $84 million.
Although the bank suits involve large sums of money owed, banking sources in New York say that it probably would not be difficult to resolve the dispute -- provided trust could be reestablished between the banks and the Iranian government. Iranian government officials have said that the freeze prevented them from continuing payments on loans, and that once the freeze is lifted the way would be clear for Iran to pay its debts.
Chase spokesman yesterday had no comment on the bank's legal proceedings against Iran.
More difficult than resolution of the bank suits, however, is the matter of corporate claims against the Iranian government, government sources say.
Major oil drilling companies, for example, want compensation for valuable equipment left behind in Iran and now held by that government, as well as payment on outstanding bills.
The largest claimant is Sedco Inc., the Dallas-based corporation that did a major share of its overseas business in Iran. Its subsidiary Sediran was a joint venture with the Pavlavi Foundation -- the shah's charitable and personal investment institution.
A Sedco official in Dallas said it has had difficulty locating attachable assets of the National Iranian Oil Co. for which it was working.
Sediran seeks to attach $105 million mostly as reimbursement for 10 drilling rigs still in Iran. Reading & Bates Corp., another major oil drilling firm is seeking to attach $36 million in Iran assets.
DuPont Corp., which has filed for $93 million, seeks reimbursement for its "loss of equity" in the Polyacryl Iran Corp., which was building a huge synthetic textile complex in partnership with Iranian entrepreneurs.
DuPont said in its suit that it paid $43 million for 40 percent of the company's stock. DuPont wants that money back along with $19 million for increased equity on the original investment.
Finally, duPont seeks to attach $10 million to cover "anticipated dividends," and $20 million for work done.
Reaching a settlement on such claims also could involve major legal wrangles.
The final hearing on the companies attachment actions originally had been scheduled for March 10 before Judge Duffy. Briefs were due yesterday. b
The State Department several weeks ago indicated it had no objection to this timetable.
However, on Thursday a Justice Department lawyer went to Duffy, equipped with a State Department legal memorandum stating that "the situation has changed" because of the hostage negotiation. The government sought a 30-day postponement in the proceedings.
In his order yesterday, Duffy granted only a partial delay -- retaining the March 10 date for the final hearing but approving a 13-day postponement in the filing of the briefs.