Judicial Options Listed Vote for yours

Why outcome we will have? Send me your election and explanation to eab@garridolawfirm.com of the options listed in this paper:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2255962

Or other options not listed

Eugenio A Bruno

Upcoming paper on Argentina Debt with questions and answers

I am writing a paper with questions from people that are following the Argentina Debt situation. In case you would like to ask, please send your questions to: eab@garridolawfirm.com

My new book already in Amazon

My new book already in Amazon.com, along my last one:

 "Sovereign Debt and Sovereign Debt Restructuring"
May, 2013

"Global Financial Crisis"
September 2009

Eugenio A Bruno

Leading paper in the Social Science Research Network from the United States

Paper on the strategy of NML listed as top ten in the most consulted scholar international website

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2255962

The Banco Nacion case in New York anticipates a new battle: attachment of bank accounts and state-owned companies?

 

The Banco Nacion case in New York anticipates a new round of attachments, in particular, against state-owned companies

 Eugenio A Bruno - Garrido Law Firm - TIG Americas

NML asked judge Griesa to oblige Banco de la Nacion Argentina to disclose the bank accounts in said financial institution of the government of Argentina, its state-owned companies (where the government owns more than 25 per cent of the capital) and certain individual officers. Judge Griesa accepted the NML's asking and ordered, on February 8, to Banco Nacion to disclose such information. The order includes bank accounts not only in the branch of Banco Nacion at New York but also in various countries, including Uruguay, Panama, Brasil and España, among others. BNA responded yesterday (we dont have the response yet, but expect to have it today).
The purpose of the asking of course is to identify those assets with a view to eventually attach them if that is possible under U.S. law.
What assets may NML attach? Of course, NML and other litigant holdouts have tried to attach 30 different assets since 2002, failing in most of the cases. Therefore the odds are still against the fortunes of NML. And that's why the pari passu/Bank of New York case being litigated at the U.S. Court of Appeals is so important, basically because of the prior failures.
The likelihood of attachments of bank accounts of the federal government at Banco Nacion outside Argentina is not high taken into account various precedents similar to this case, particularly bank accounts of the Anses in New York in 2010.
However, the Banco Nacion case will bring into the attention of the parties the bank accounts of state-owned companies, in which the government owns more than 25 per cent.
As an initial clarification we need to say that as such companies are legally separated from the federal government they are therefore not the debtor under the bonds in default (the federal government is) and consequently they are not responsible for the repayment of them. Thus their assets should be immune from attachments based on claims against the federal government. However, there is one exception that may turn their assets into "attachable" ones: that exception is called the "alter ego theory" and means that if those companies are managed by the federal government, then "they would be considered part of it". The criteria to determine whether or not they are managed by the federal government depends on the facts of each case but the main defense is if they are managed independently, with a management team of their own and does not follow instructions from the government. If they dont pass this test, their assets may be attachable.
The alter ego theory was applied by Griesa and the Court of Appeals in a case against Argentine Central Bank reserves, but the U.S. Supreme Court reversed their decisions by using a different protection specifically existing for those kind of reserves arising from the U.S. Foreign Sovereign Immunities Act. But there is no similar protection for assets owned by state companies if they are controlled by the government.

Finally, on a related aspect, NML and other holdout litigants might attempt to attach the shares of the government in YPF, under the theory that those shares are commercial assets and therefore subject to attachments. For the moment it is too soon to determine whether or not such attempts will succedd.

For a complete analysis of the NML latest brief see the following paper: 
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2255962

*Eugenio A Bruno is a legal counsel for investment banks, financial advisory firms, exchange bondholders and non-litigant holdouts.

 

Argentina Debt: U.S. Court of Appeals just denied the Duane Morris motion to file an Amicus brief - Now the judgment?

The United States Court of Appeals just denied the motion from the Duane Morris law firm, counsel for Italian and Argentine bondholders, to file a new amicus curiae brief.

The court only said:

"IT IS HEREBY ORDERED that the motion by Duane Morris Individual Plaintiffs for leave to file
an amicus brief is DENIED."

We believe this decision was expected as the court was not prepared to re-open the case for new amicus presentations or any kind of unsolicited briefings. The court would now either (i) take the way towards issuing the ruling (we expect a negative outcome to the Republic regarding the ratable payment and still uncertaintly relating to the extent of the injunctions), or (ii) request some briefings from experts invited by the court and/or the Bank of New York, as an affected institution.

Eugenio A Bruno
Garrido Law Firm
eab@garridolawfirm.com

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.”