BLG Building Materials##

By Gabriele Steinhauser

BRUSSELS--There will be a legal fight over a decision by the Austrian government to halt payments of the debts of defunct bank Hypo Alpe Adria, Germany's finance minister said Tuesday.

"We are both prepared to have that legal fight," Wolfgang Schäuble said.

Austria's market regulator said last month that payments on more than EUR11 billion of debt owed by Hypo's "bad bank" would be halted after the government decided not to put any more taxpayer money into the bad bank, known as HETA Asset Resolution.

One of the big holders of old Hypo debt is its former owner, German regional bank BayernLB.

Write to Gabriele Steinhauser at gabriele.steinhauser@wsj.com