U.S. Debt Collector Sues Poverty-Stricken African Country

Zambia — as in "the country of" — has started getting collection calls from Donegal International, a U.S. collection agency registered in the British Virgin Isles.

Donegal International bought some outstanding debt oweed by the African nation, and would like to recoup on its investment — the full price, plus cost and interest.

The company bought Zambia’s debt, incurred in 1979 from deals with Romania, eight years ago at a price of $3.2 million. At that time, Zambia approved the sale of the debt, and later agreed to pay $15 million to settle the debt. Donegal later sued in British court.

Donegal International, owned by Michael Sheehan, is not winning itself any fans with the courts. The judge, while ruling that legally Zambia must pay, had few kind words for Sheehan, who appeared in court to pursue Donegal’s claim, and for his consultants, whom the judge termed "dishonest and thoroughly unreliable" in their testimony to support Donegal’s freeze on Zambian assets. The judge commented on the questionable quality of the witnesses at trial, and on Mr. Sheehan’s behavior in presenting the case as well.

In the end, reports say, Zambia will probably have to pay between $10 million and $20 million, considered a victory by some over the $55 million that Donegal sought, but still a crippling blow to their social and economic recovery. Zambia officials have sought to repudiate the debt as the act of corrupt officials, but were not successful.