ANGLO IRISH Bank is being sued in federal court in New York by noteholders seeking to enforce the Dublin-based lender’s agreements on two series of notes with an aggregate principal of $200 million.

Fir Tree Capital Opportunity Master Fund and Fir Tree Value Master Fund LP, both based in the Cayman Islands, said a planned merger of Anglo Irish with the Irish Nationwide Building Society puts the principal and interest payments to which they were entitled in jeopardy.

The funds are seeking a receiver to take charge of assets in the US.

“Accordingly, the noteholders bring this action to enforce their contractual and equitable rights under the agreement,” the hedge fund said in the complaint.

“The terms of the agreement and notes obligate Anglo Irish Bank to pay principal, premium [if any] and interest on the notes,” it claimed.

Anglo Irish was taken over by the Government two years ago. Last week, the Government ordered the bank and a second State-controlled lender, Irish Nationwide Building Society, to sell their deposits and some assets.

The National Treasury Management Agency, which is in charge of bank restructuring, said last Tuesday it would “immediately commence an auction process to invite interested, fully licensed financial institutions” to bid for Anglo Irish’s and Irish Nationwide’s deposits.

The funds say that, unless a receiver is appointed, Anglo Irish Bank will continue to dispose of its assets in the US, preventing noteholders from recovering any judgments they might win against the bank.

Under the February 8th order, Anglo Irish and Irish Nationwide are to be merged as part of a restructuring plan, subject to European Commission approval, Anglo said in a separate statement.

The joint plan was filed with the European Union earlier this month.

The plaintiffs say that the merger between Anglo Irish and Irish Nationwide Building Society “plainly and brazenly violate the bank’s covenants in the note purchase agreement”.

The bank lost €16 billion, or 59 per cent, of its deposits last year, the company said in a statement. The pretax loss exceeds the €12.8 billion loss the bank posted for the 15 months to the end of December 2009. – Bloomberg