Argentina Sovereign Debt: Duane Morris (Italian retails) Amicus: The Outrageous Response from the Republic

Duane Morris (Italian retails) Amicus: The Outrageous Response from Argentina

Eugenio A Bruno

Garrido Law Firm

TIG Americas

We need to revisit what Duane Morris said in its amicus brief (legal counsel for retail Italian and Argentine investors): “The only sensible resolution is a lump-sum payment of all interest and principal that has accrued and become due and payable . . . to all the current holders of the holdout bonds.”

They mean: the upcoming ruling from the Court of Appeals and/or the U.S. Supreme Court, per se, will apply to ALL HOLDOUTS by operation of law. This is making a ruling of USD 1.47 billion into one of USD 15 billion, just like that…

So, what Argentina responded??????

1)      “See judges, the ´me toos´ will come after us to get paid!

In Argentina´s professional words: “First, the motion (from Duane Morris) demonstrates that the present appeal does not concern “only” the $1.47 billion demanded by NML and the other plaintiffs appellees, but potentially the entire amount of outstanding defaulted Republic debt subject to a pari passu clause. As the Republic demonstrated in its Proposal – and as neither plaintiffs nor the Duane Morris Individual Plaintiffs dispute – acceptance of the district court’s “ratable payment” formula could open the floodgates for over $15 billion in similar pari passu claims… The Duane Morris Individual Plaintiffs are themselves just one group of defaulted debt holders who would invoke the same language to demand immediate payment in full, plus interest. Many others will surely follow.”

2)      “NML wants to get paid, runs with the money, and if Argentina does not have more money, the me toos would need to prove that. NML does not care about the me toos and how Argentina will need to deal with them. This lawsuit is ´only´ about USD 1.47. Who cares about the rest? We, as the Argentine government, do¨

In more professional arguments by Argentina: “In an attempt to escape this economically unsustainable result, plaintiffs urge the Court to adopt a “first come, first served” pari passu remedy whereby plaintiffs get paid in full because they brought their pari passu claims first, and all other holdout creditors that follow get whatever is “equitable” at that point in time. See Pls. NML Proposal Response at 12 (“If holders of other defaulted

indebtedness later bring equal treatment claims of their own, Argentina will have ample opportunity . . . to make a showing of financial need, based on

circumstances then prevailing, for the district court to consider in shaping a

remedy.”). This proposed remedy demonstrates that plaintiffs do not want “equal treatment” at all, but to enforce their monetary claims in full, regardless of what other, exactly similarly situated creditors receive.”

3)      “Duane Morris´ brief (but also NML submission on April 19) are replete with errors (of course) and if you judges accept further briefing, we will reply (please accept more – but reject its content down the road - so the case takes more have more time but we prevail against them)”

Professionally speaking: “Second, both the Duane Morris Individual Plaintiffs’ proposed submission and plaintiffs’ April 19 brief are replete with errors. If the Court allows any further briefing, the Republic respectfully requests the opportunity to submit a brief reply to correct them… For the foregoing reasons, if the Duane Morris Individual Plaintiffs’ motion for leave to file an amicus brief is granted, the Republic should be permitted

to reply to it, as should the many other interested parties.”

4)      “The Duane Morris´s crazy petition shows that our payment proposal is the only one that you judges should accept as viable to solve the problem with the defaulted debt”

The final professional comments: “There are thousands of claim-holders that are similarly situated to plaintiffs. This case has far broader implications than plaintiffs’ claims alone. The Republic can sustainably service all outstanding claims if its Proposal for pari passu debt service is accepted, because only this Proposal reflects the equitable consideration of all potential claimants, both those who have filed claims already, and those who could do so in the future under plaintiffs’ pari passu interpretation.”