Motorola, Nokia seek $3 billion Uzan World Bank claim

Motorola Inc. and Nokia Oyj won a total $4.8 billion judgment against members of the Uzan family - - Turkish fugitives who were once owners of that country's second-largest cell phone company -- in a 2002 lawsuit in New York. Of that, $3.4 billion remains unpaid.

Now, Motorola and Nokia say in court papers that they've identified a Cypriot shell company as the Uzans' "alter ego." The company, Libananco Holdings Co., has a $10 billion claim against Turkey pending before World Bank arbitrators over the seizure of two Uzan electricity companies. Motorola and Nokia are asking a U.S. judge to seize Libananco's claim against Turkey in that case in Washington.

"Libananco is a sham entity" and is the Uzans' "stalking horse," Motorola, the biggest U.S. mobile-phone maker, and Nokia, the world's largest, say in a Sept. 21 filing in federal court in Manhattan, where they won their original judgment against the Uzans.

"Success on the $10 billion Libananco claim would result in a significant known Uzan asset" that may be used to satisfy the phone companies' judgment, they said.

U.S. District Judge Jed Rakoff, who is presiding over the New York lawsuit, scheduled a hearing for Nov. 19 on the bid by Schaumburg, Illinois-based Motorola and Espoo, Finland-based Nokia to seize Libananco assets. The phone makers say Libananco's claim against Turkey is its only asset.

Stuart Newberger, a lawyer for Libananco in Washington, and Stan Mortenson, the Uzans' attorney in the New York case, didn't return calls seeking comment.

Telsim Loan

Motorola and Nokia's lawsuit in New York stemmed from financing provided to the Uzans' Telsim Mobil Telekomunikasyon Hizmetleri AS, which sought to double its capacity through the purchase of equipment, phones and services. A series of contracts left Telsim owing Motorola and Nokia a total of $2.7 billion by 2000. After Telsim failed to make a payment on the loan, Motorola and Nokia sued, claiming members of the controlling Uzan family borrowed the $2.7 billion in bad faith.

The Uzans failed to appear for the civil trial in New York. Rakoff issued a judgment against them and an order for their arrest if they came to the U.S. The Uzans denied wrongdoing and claimed in court the matter should have been resolved through arbitration in Switzerland. In a series of rulings, Rakoff ordered them to pay $3.1 billion to Motorola Credit Corp. and $1.7 billion to Nokia.

The judgment included punitive damages along with the money owed to Motorola and Nokia from the loans.

Fourth Richest Man

The five Uzan family members sued by Motorola and Nokia included Kemal Uzan, once Turkey's fourth richest man, and his wife, Melahat. Kemal Uzan has been a fugitive since 2003 when an arrest warrant was issued for him on embezzlement charges connected to a bank collapse. The other family members named as defendants were Uzan's sons, Cem and Hakan, and their sister, Aysegul Akay. Hakan is wanted by Turkish authorities.

According to the phone companies, Cem Uzan is reportedly in Turkey while the whereabouts of the others are unknown.

Motorola and Nokia say they've been "vigorously" pursuing worldwide efforts to collect their judgment against the Uzans and have seized some family assets.

The phone makers say they have searched and seized Uzan assets in 11 countries, including homes in New York and London, bank accounts, two airplanes and a yacht worth about $125 million. They also collected $1.25 billion in a settlement with Turkey following the government's seizure of Telsim assets.

'Not Voluntarily Paid'

"The Uzans have not voluntarily paid one cent," Motorola and Nokia said in their court filing last month. The companies say the Uzans are still billionaires and "have resisted enforcement by refusing to provide post-judgment discovery, shifting assets into corporate entities they control" and going into hiding as fugitives, the phone-makers said.

"The Uzans, despite their setbacks in Turkey, have committed business as usual, establishing a new web of companies, operating out of Jordan, while continuing to evade their creditors," Motorola and Nokia said.

Libananco filed its claim against Turkey in 2006 before the World Bank's International Centre for Settlement of Investment Disputes in Washington. The Cyprus-based firm claims Turkey violated the Energy Charter Treaty, which protects investors in the Turkish energy sector from unlawful expropriation, according to a Libananco press release at the time.

Sole Shareholder

Motorola and Nokia say Libananco's sole shareholder is a long-serving Uzan ally indicted in Turkey for trying to smuggle an antique gun into Jordan, "presumably for Hakan Uzan." They say the man has conceded he's an agent for the Uzans and that Turkey has argued that Libananco is "a shell entity owned and controlled by the Uzans."

"Libananco fails to explain how it, a single-purpose entity with seemingly no going concern, purchased 66 percent of the stock of these multibillion-dollar companies," Motorola and Nokia said, referring to the Turkish electricity providers Cukurova Elektrik AS and Kepez Elektrik TAS.

Telsim is now owned by Vodafone Group Plc, the world's largest mobile-phone company.