tag:blogger.com,1999:blog-90658863641996530102024-03-14T11:54:29.694-07:00rolf´s pari passu clause blogUnknownnoreply@blogger.comBlogger139125tag:blogger.com,1999:blog-9065886364199653010.post-20086590091679632912013-09-15T19:16:00.001-07:002013-09-15T19:16:23.107-07:00Grenada Is Not Argentina<h3 class="post-title entry-title" itemprop="name" style="background-color: #fff9ee; color: #222222; font-family: Georgia, Utopia, 'Palatino Linotype', Palatino, serif; font-size: 24px; font-weight: normal; margin: 0.75em 0px 0px; position: relative;">
<a href="http://rolfsgriechenlandblog.blogspot.de/2013/09/grenada-is-not-argentina.html" style="color: #888888; text-decoration: none;">Grenada Is Not Argentina</a></h3>
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<a class="article_title active" href="http://www.nationalreview.com/bench-memos/356463/grenada-not-argentina-rich-samp" style="color: #34b0e0; letter-spacing: 0.01em; margin: 0px; text-decoration: none;">Grenada Is Not Argentina</a></div>
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By <a class="story_subtext" href="http://www.nationalreview.com/author/1005862" style="color: rgb(52, 176, 224) !important; letter-spacing: 0.01em; text-decoration: none; vertical-align: top;">Rich Samp</a></div>
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<a class="blog_date_permalink active" href="http://www.nationalreview.com/bench-memos/356463/grenada-not-argentina-rich-samp" style="color: #666666; text-decoration: none;">August 22, 2013 11:16 AM</a></div>
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<span style="font-size: 1em; letter-spacing: 0px; line-height: 1.5em;">Some in the financial markets have had mixed reactions to the U.S. Court of Appeals for the Second Circuit’s<em> <a href="http://www.ca2.uscourts.gov/decisions/isysquery/03d01604-aec1-481b-a891-a14e16388ce7/2/doc/12-105_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/03d01604-aec1-481b-a891-a14e16388ce7/2/hilite/" style="color: #333333; text-decoration: none;">NML Capital, Ltd. v. Republic of Argentina</a></em></span><span style="font-size: 1em; letter-spacing: 0px; line-height: 1.5em;"> decision, which required Argentina to treat all of its bondholders equally. On the one hand, they are happy that the decision prevents solvent debtors like Argentina from making take-it-or-leave-it demands to bondholders and refusing all payments to those who don’t knuckle under. On the other hand, some Cassandras warn that the decision’s protections for the rights of holdout bondholders will prevent nations facing financial crises from undertaking an orderly restructuring of their debts.</span><br />A decision handed down yesterday by a federal district court in New York, <em><a href="http://wlflegalpulse.files.wordpress.com/2013/08/show_temp1.pdf" style="color: #333333; text-decoration: none;">Export-Import Bank of China v. Grenada</a></em>, should put to rest many of those concerns. The decision, issued in connection with claims against the island nation of Grenada, makes clear that the<em> NML</em> decision is limited to Argentina’s unique status as a deadbeat debtor willing to thumb its nose at its legitimate creditors. Mere nonpayment by sovereign nations acting in good faith, the court explained, will not trigger the sort of injunctive relief for bondholders that the Second Circuit upheld in<em>NML</em>.<br />Earlier this year, the Export-Import Bank of the Republic of China (“Ex-Im Bank”) filed suit against Grenada, seeking to enforce a pari passu clause in its loan agreement with the nation. In 2005, following financial setbacks caused by Hurricanes Ivan and Emily, Grenada sought to restructure its foreign debt. The Ex-Im Bank did not participate in the restructuring and instead obtained a court judgment on its debt. Since then, Grenada has made some interest payments on its restructured debt but has paid nothing to Ex-Im Bank. Apparently hoping to piggy-back on the <em>NML</em> decision, Ex-Im sought an injunction against any further interest payments to holders of Grenada’s restructured debt unless payments were also made to Ex-Im Bank.<br />The district court yesterday denied Ex-IM’s motion for judgment on the pleadings, explaining that the <em>NML</em> injunction had been based on a unique set of circumstances. Argentina did not merely fail to make payments to some bondholders while making interest payments to others; it also took numerous executive and legislative actions designed to ensure that, in direct violation of “equal treatment” promises it made as part of its pari passu clause, the debt held by disfavored bondholders would be effectively subordinated to debt held by other bondholders. Indeed, Argentina went so far as to adopt a “Lock Law” that prohibited all payments to bondholders who did not accept its take-it-or-leave-it restructuring offer, and to declare those bonds unenforceable in Argentina’s own courts.<br />The district court held that Ex-Im did not allege any similar conduct by Grenada. While noting that Grenada is alleged to have made occasional payments to other creditors since it stopped making payments to Ex-Im in 2008, the court held that Grenada’s payment history did not demonstrate anything approaching the sort of discriminatory treatment that gave rise to the <em>NML</em> injunction against Argentina. Indeed, the court noted that earlier this year Grenada announced that it did not have the resources to make even the interest payments on its bonds, and that it would seek once again to restructure its debts.<br />The Ex-Im Bank will still have an opportunity, following completion of pre-trial discovery, to attempt to prove that Grenada has engaged in same sort of discriminatory conduct that led the Second Circuit to uphold injunctive relief against Argentina. But yesterday’s decision should put to rest concerns that pari passu litigation may “go viral.” The court said that, even assuming that Ex-Im Bank could show that the pari passu clause agreed to by Grenada is as fulsome as the one at issue in <em>NML </em>– a doubtful assumption, based on my reading of the documents — Ex-Im could not obtain injunctive relief in the absence of a showing, similar to the one made against Argentina, that Grenada took steps to effectively block all prospect of future payment on Ex-Im indebtedness.<br />The disparate circumstances facing Grenada and Argentina undoubtedly played a role in yesterday’s district court decision. Grenada is a poor nation which is in arrears on all its foreign debt. Grenada is treating Ex-Im Bank and all other creditors the same; it’s not paying any of them. Argentina’s economy, on the other hand, is recovering nicely, and the Second Circuit determined that Argentina has more than sufficient foreign reserves to pay all its debts to bondholders. Argentina is not paying holdout bondholders because it chooses not to; as the district court recognized, Grenada is not paying Ex-Im Bank because, at least in the near term, it can’t.<br />Finally, one needs to remember that the federal courts did not enter injunctive relief until after having to endure nearly a decade of Argentina’s flat-out refusals to honor its debt obligations. Argentina’s infamous Lock Law prohibited treasury officials from paying so much as a penny to bondholders who were unwilling to accept the nation’s take-it-or-leave-it proposal of a 70 percent haircut. The patient approach that federal courts adopted for so many years in response to Argentinian intransigence is a strong indication that they will enforce equitable-treatment obligations imposed by pari passu clauses only after they become convinced that a sovereign debtor has abandoned all pretense of fairness among its creditors. Yesterday’s decision is one more indication that the federal courts will not allow holdout creditors to disrupt reasonable bond-restructuring efforts.<br /><span class="bioline" style="color: #666666;"><em>— Rich Samp is chief counsel for litigation at the <a href="http://www.wlf.org/" style="color: #666666; text-decoration: none;">Washington Legal Foundation</a>.</em></span><br /><span class="bioline" style="color: #666666;"><em><br /></em></span><span class="bioline" style="color: #666666;"><a href="http://www.nationalreview.com/bench-memos/356463/grenada-not-argentina-rich-samp" style="color: #888888; text-decoration: none;">http://www.nationalreview.com/bench-memos/356463/grenada-not-argentina-rich-samp</a></span></div>
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Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-9065886364199653010.post-43556271380872636632013-08-23T17:12:00.001-07:002013-08-23T17:12:31.358-07:00Argentina’s pari passu upset — redux<div class="entry-header" style="background-color: #fff1e0; font-family: Georgia, 'Times New Roman', Times, serif; font-size: 16px; line-height: 24px;">
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<a href="http://ftalphaville.ft.com/2013/08/23/1612253/argentinas-pari-passu-upset-redux/" style="-webkit-font-smoothing: antialiased; border-width: 0px; text-decoration: none;"><span style="color: red;">Argentina’s pari passu upset — redux</span></a></h1>
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<span style="font-weight: 700;"><a class="overlayButton" href="http://ftalphaville.ft.com/meet-the-team/joseph-cotterill/" rel="author" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; font-size: 1.2em; text-decoration: none;">Joseph Cotterill </a></span><span class="meta-divider" style="padding: 0px 4px;">| </span><span class="entry-date">Aug 23 16:36</span> <span class="meta-divider" style="padding: 0px 4px;">| </span><a href="http://ftalphaville.ft.com/2013/08/23/1612253/argentinas-pari-passu-upset-redux/#respond" infernoref="24_1612253" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">10 comments </a><span class="meta-divider" style="padding: 0px 4px;">| </span><span class="social-links-popup linkButton small" style="display: inline; position: relative;"><a class="white shareButton overlayButton" href="" style="-webkit-font-smoothing: antialiased; background-image: url(http://im.ft-static.com/m/img/button_sprite.png); border-width: 0px; color: #2e6e9e;"><span style="background-image: url(http://im.ft-static.com/m/img/button_sprite.png); color: white; cursor: pointer; display: inline-block; line-height: 15px; padding: 1px 4px 0px;">Share</span></a></span></div>
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Part of the <span class="tag-name" style="background-image: url(http://ftalphaville.ft.com/wp-content/themes/wrapper-alphaville/img/show-more.png); background-position: 6px -115px; background-repeat: no-repeat no-repeat; cursor: pointer; display: inline-block; font-weight: bold; padding: 0px 0px 0px 18px; text-transform: uppercase;"><span class="adtext" id="adtext_1" style="border-left-color: transparent; border-right-color: transparent; border-style: solid; border-top-color: transparent; border-width: 1px; color: #009900; cursor: pointer; display: inline !important; float: none; font-weight: normal; list-style: none; margin: 0px; padding: 0px; text-decoration: underline;">PARI PASSU</span> SAGA SERIES</span></div>
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Got a problem with <span class="adtext" id="adtext_6" style="border-left-color: transparent; border-right-color: transparent; border-style: solid; border-top-color: transparent; border-width: 1px; color: #009900; cursor: pointer; display: inline !important; float: none; list-style: none; margin: 0px; padding: 0px; text-decoration: underline;">Argentina</span> being made to pay holdouts alongside its restructured bondholders?</div>
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Reckon it might happen to your sovereign (even if Argentina is apparently a “uniquely recalcitrant” debtor) and screw up its next debt restructuring?</div>
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<em>Deal with it,</em> says the Second Circuit of the United States Court of Appeals:<span id="more-1612253"></span></div>
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<a href="http://ftalphaville.ft.com/files/2013/08/Ultimately.png" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank"><img alt="" class="alignnone wp-image-1612413" height="273" src="http://ftalphaville.ft.com/files/2013/08/Ultimately-590x341.png" style="border: 0px; max-width: 100%;" width="472" /></a></div>
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We can see that direct warning to <a href="http://ftalphaville.ft.com/2012/12/06/1298193/all-of-this-has-happened-before-and-will-happen-again-sovereign-pari-passu-edition/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="All of this has happened before and will happen again, sovereign pari passu edition - FT Alphaville">redraft </a>pari passu clauses being taken.</div>
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That’s the court dispatching all the wider fears about the pari passu saga and sovereign debt restructuring on Friday — even as it <a href="http://ftalphaville.ft.com/files/2013/08/NMLvArgentina.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="NML v Argentina, August 23, 2013">finally declared</a> that it won’t accept Argentina’s suggested alternative for paying the holdouts. (Hardly a surprise — Argentina’s plan <a href="http://ftalphaville.ft.com/2013/04/20/1468012/argentina-and-an-offer-easily-refused/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Argentina and an offer easily refused - FT Alphaville">was a debacle</a>.)</div>
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Some quick takes as we read the opinion on Friday…</div>
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First and foremost, ratable payment is go:</div>
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As the district court concluded, the amount currently owed to plaintiffs by Argentina as a result of its persistent defaults is the accelerated principal plus interest. We believe that it is equitable for one creditor to receive what it bargained for, and is therefore entitled to, even if other creditors, when receiving what they bargained for, do not receive the same thing.<span style="font-weight: 700;">The reason is obvious: the first creditor is differently situated from other creditors in terms of what is currently due to it under its contract…</span></div>
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Right now, though, the Second Circuit’s ferocity is neutered because at the same time it’s also stayed the order to pay holdouts, while the Supreme Court decides whether to accept Argentina’s petition to review the case’s impact on sovereign immunity. Since the earliest the Supreme Court can do that is September, Argentina’s restructured payments before then might be OK, which is why we expect Argentine bonds would rally now.</div>
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Then again, that’s not such a long time, and the Second Circuit’s given no quarter. Even the hint of dissent’s tinier than an actual dissent — it’s literally a footnote:</div>
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Judge Pooler disagrees with the majority decision to dismiss the appeals of EBG, Fintech, Euro Bondholders, and ICE Canyon. However, as the arguments of the dismissed appellants are treated as made by amici, and as the status of the non-appellants matters little to the outcome here, Judge Pooler has agreed to note her disagreement for the record in this footnote, rather than dissent…</div>
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<span style="font-weight: 700;">Third parties</span></div>
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That hint of dissent is still interesting though, as the Second Circuit ended up giving practically no ground to any third parties (including Bank of New York and clearing-houses) involved in Argentina paying its restructured bondholders. They therefore face serious legal risk beyond the stay (or any Supreme Court dismissal). And the Second Circuit does it all in very punchy language:</div>
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This type of harm—harm threatened to third parties by a party subject to an injunction who avows not to obey it—does not make an otherwise lawful injunction “inequitable.” <span style="font-weight: 700;">We are unwilling to permit Argentina’s threats to punish third parties to dictate the availability or terms of relief…</span></div>
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When it comes to the restructured holders, the court bluntly tells them that they should have read their own bond contracts — where Argentina apparently warned that holdout litigation might stop payments to them. It also says that “if Argentina decides to default on the Exchange Bonds… Exchange Bondholders <em>would then be able to sue over that default</em>“. (Emphasis ours.)</div>
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We sense that’s going to be cold comfort.</div>
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The court’s answer to third parties tied to the payments system itself is more technical in terms of the law (BNY’s interventions in this case in particular have been all about how civil procedure works) but no less sweeping:</div>
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BNY and Euro Bondholders argue that the district court erred by purporting to enjoin payment system participants over which it lacks personal jurisdiction. But the district court has issued injunctions against no one except Argentina. Every injunction issued by a district court automatically forbids others—who are not directly enjoined but who act “in active concert or participation” with an enjoined party—from assisting in a violation of the injunction…</div>
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The amended injunctions simply provide notice to payment system participants that they could become liable… if they assist Argentina in violating the district court’s orders.</div>
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Effectively the likes of BNY are being told to go back to Judge Griesa for clarification on whether the holdouts can file suit against them, the next time Argentina tries to pay restructured holders without paying NML et al, and without the stay in place. It’s very hard to see BNY sticking around for long as the trustee for the restructured bonds in these circumstances.</div>
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Even Argentina’s foreign-law bondholders — who have been up in arms, and <a href="http://ftalphaville.ft.com/2013/07/01/1551742/pari-passu-tussles-in-brussels/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Pari passu — tussles in Brussels - FT Alphaville">ready to go</a> to Belgian courts to effect a Mexican standoff with US judges over their right to be paid — get short shrift:</div>
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If ICE Canyon and the Euro Bondholders are correct in stating that the payment process for their securities takes place entirely outside the United States, then the district court misstated that, with the possible exception of Argentina’s initial transfer of funds to BNY, the Exchange Bond payment “process, without question takes place in the United States.”… <span style="font-weight: 700;">But this possible misstatement is of no moment because, again, the amended injunctions enjoin no one but Argentina…</span></div>
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…We have never been presented with the question whether U.S. sanctions legally apply to non-U.S. persons or institutions, and we do not answer that question today. We merely note that both foreign and domestic financial institutions are already required to police their own transactions in order to avoid violations of potentially applicable United States laws and regulations…</div>
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<span style="font-weight: 700;">Pari passu and the public interest</span></div>
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Ultimately the real fireworks are at the end though: it’s this question of precedent for sovereign debt restructuring, and whether ratable payment built on pari passu will now convince more bondholders to become holdouts at the margin. It’s slightly curious in that this stuff was never going to decisively sway the case one direction or the other.</div>
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Still, the Second Circuit comes over very defensive here:</div>
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Our decision here does not control the interpretation of all pari passu clauses or the obligations of other sovereign debtors under pari passu clauses in other debt instruments. <span style="font-weight: 700;">As we explicitly stated in our last opinion, we have not held that a sovereign debtor breaches its pari passu clause every time it pays one creditor and not another,</span> or even every time it enacts a law disparately affecting a creditor’s rights… We simply affirm the district court’s conclusion that Argentina’s extraordinary behavior was a violation of the particular pari passu clause found in the FAA.</div>
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Really? Actually we think that explicit statement is not all it appears. And that’s because the <em>NML v Argentina</em> legacy for the uses and abuses of pari passu has already begun to be litigated for other sovereigns.</div>
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After all, here’s a US district court judge <a href="http://ftalphaville.ft.com/files/2013/08/Grenada_Aug.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Opinion and order, Ex-Im Bank v Grenada">holding forth</a> in <em>Ex-Im Bank v Grenada</em> this week (basically to confirm that more work is needed in that case to see if Grenada’s been as “recalcitrant” a debtor as Argentina):</div>
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The fact is that in NML, the Second Circuit <span style="font-weight: 700;">specifically left open the question</span> of whether “a breach would occur with <span style="font-weight: 700;">any</span> non-payment that is coupled with payment on other debt . . . . [or] whether ‘legislative enactment’ alone could result in a breach” and chose to “simply affirm the district court’s conclusion that Argentina’s course of conduct here did.”</div>
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The Second Circuit didn’t explicitly state that pari passu breaches can be any time one creditor gets money and another doesn’t, that’s true — but they didn’t explicitly<em>rule it out</em> either. They’ve now passed up another opportunity to clear it up. That could be a huge fissure in pari passu litigation going forward.</div>
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Lastly, the court once again points to collective action clauses as anti-holdout devices which will prevent another Argentina. Even if holdouts get enough votes to block a CAC, “a restructuring failure on one series would still allow restructuring of the remainder of a sovereign’s debt,” says the court. So is losing one series an acceptable level of violence for a restructuring? It’s an interesting question — Greece famously won massive, 90 per cent plus acceptance of its PSI last year through (local-law) CACs. But you still see huge anger over having to pay billions of euros in foreign-law bonds which failed to CAC.</div>
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Some are probably going to want to see that <a href="http://ftalphaville.ft.com/2013/07/24/1579752/the-imf-wont-be-argentinas-pari-passu-frenemy-why/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="The IMF won’t be Argentina’s pari passu frenemy. Why? - FT Alphaville">abortive </a>IMF amicus brief eventually surface at the Supreme Court on these issues after all…</div>
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<span style="font-weight: 700; text-transform: uppercase;"><a href="http://ftalphaville.ft.com/tag/pari-passu-saga/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">PARI PASSU SAGA SERIES</a></span></div>
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The "trial of the century" in sovereign debt restructuring, in our <span class="adtext" id="adtext_4" style="border-left-color: transparent; border-right-color: transparent; border-style: solid; border-top-color: transparent; border-width: 1px; color: #009900; cursor: pointer; display: inline !important; float: none; list-style: none; margin: 0px; padding: 0px; text-decoration: underline;">humble opinion</span>. The story of Argentina, its holdout creditors, the grande finale (or is it?) of their battle in US courts.</div>
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<div class="related-articles">
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<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2012/10/26/1232561/a-pari-passu-upset/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">A pari passu upset?</a></li>
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<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2012/11/22/1276313/poker-with-judge-griesa-part-one/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Poker with Judge Griesa, part one</a></li>
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<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/03/01/1406782/give-us-a-formula-argentina/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Give us a formula, Argentina</a></li>
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<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/03/06/1412972/pari-passu-the-cross-sovereign-contamination/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Pari passu, the cross-sovereign contamination</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/03/11/1418412/and-the-beat-goes-on-pari-passu-and-sovereign-restructuring-edition/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">And the beat goes on, pari passu and sovereign restructuring edition</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/03/26/1440332/argentina-en-banc-mais-non/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Argentina en banc? Mais non</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/04/01/1442982/argentinas-gonna-make-him-an-offer-he-can-refuse-part-one/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Argentina's gonna make him an offer he can refuse, part one</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/04/01/1443202/argentinas-gonna-make-him-an-offer-he-can-refuse-part-two/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Argentina's gonna make him an offer he can refuse, part two</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/04/10/1455002/the-pari-passu-saga-catch-up-quickly-video-edition/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">The pari passu saga, catch up quickly video edition</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/04/20/1468012/argentina-and-an-offer-easily-refused/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Argentina and an offer easily refused</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/04/29/1476022/if-you-tolerate-this-more-holdout-lawsuits-will-be-next/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">If you tolerate this, more holdout lawsuits will be next</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/05/23/1513992/pari-passus-peso-problem/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Pari passu's peso problem?</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/06/04/1524032/welcome-to-belgium-please-pari-passu-carefully/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Welcome to Belgium. Please pari passu carefully</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/06/27/1535522/days-of-future-pari-passu/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Days of future pari passu</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/06/27/1543522/pari-passu-judgment-day/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Pari passu: judgment day</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/06/27/1549082/the-negative-pledge-saga/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">The negative pledge saga?</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/07/01/1551742/pari-passu-tussles-in-brussels/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Pari passu -- tussles in Brussels</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/07/24/1579752/the-imf-wont-be-argentinas-pari-passu-frenemy-why/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">The IMF won't be Argentina's pari passu frenemy. Why?</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/07/29/1583962/france-sallies-forth-into-pari-passu-case-shows-more-esprit-than-washington-surrender-monkeys/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: black; text-decoration: none;">France sallies forth into pari passu case, shows more esprit than Washington surrender monkeys</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/08/23/1612253/argentinas-pari-passu-upset-redux/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Argentina's pari passu upset -- redux</a></li>
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This entry was posted by <a href="http://ftalphaville.ft.com/meet-the-team/joseph-cotterill/" rel="author" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" title="Posts by Joseph Cotterill">Joseph Cotterill</a> on <time class="entry-date" pubdate="">Friday August 23rd, 2013 16:36</time>. Tagged with<a href="http://ftalphaville.ft.com/tag/argentina/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Argentina</a>, <a href="http://ftalphaville.ft.com/tag/pari-passu-saga/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Pari Passu Saga</a>, <a href="http://ftalphaville.ft.com/tag/sovereign-debt/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Sovereign Debt</a>.</div>
Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-9065886364199653010.post-30159102058142050912013-03-10T00:16:00.003-08:002013-03-10T00:16:40.973-08:00hier gehts Grenada pari passu mässig an den Kragen....<br />
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<a href="http://rolfsgriechenlandblog.blogspot.de/2013/03/hier-gehts-grenada-pari-passu-massig.html" style="color: #ff1900; text-decoration: none;">hier gehts Grenada pari passu mässig an den Kragen....</a></h3>
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<a href="http://rolfjkoch.blogspot.de/2013/03/hier-gehts-grenada-pari-passu-massig.html" style="color: #33aaff; text-decoration: none;">hier gehts Grenada pari passu mässig an den Kragen....</a></h3>
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<br /><b><span style="color: blue;">PLAINTIFF(S) ADDRESS(ES) AND COUNTY(IES)</span></b><br />The Export-Import Bank of the Republic of China<br />3 Nanhai Road, 8th Floor<br />Taipei (100) Taiwan<br />Republic of China<br /><br /><b><span style="color: blue;">DEFENDANT(S) ADDRESS(ES) AND COUNTY(IES)</span></b><br />Grenada<br />Ministry of Finance<br />Financial Complex<br />Carenage, St. George's, Grenada<br /><br /><br />Paul E. Summit<br />Andrew T. Solomon<br />SULLIVAN & WORCESTER LLP<br />1633 Broadway<br />New York, NY 10019<br />(212)660-3000<br />Attorneys fo r Plaintiff/Judgment Creditor<br /><br />UNITED STATES DISTRICT COURT<br />SOUTHERN DISTRICT OF NEW YORK<br />THE EXPORT-IMPORT BANK OF<br />THE REPUBLIC OF CHINA,<br />-X<br />Plaintiff/Judgment Creditor,<br />-against-<br />GRENADA,<br />Defendant/Judgment Debtor.<br />-X<br />i l<br />Civil Action No:<br />COMPLAINT<br />Ca í<br />•'C<br />I<br />Plaintiff The Export-Import Bank of the Republic of China (“Ex-Im Bank”), by its-*7"<br />—<br />attorneys, Sullivan & Worcester LLP, complains of the defendant Grenada as follows^<br />• ••<br /><br /><b><span style="color: blue;">JURISDICTION AND VENUE o '</span></b><br /><br /><b><span style="color: blue;">I</span></b>. This court has jurisdiction over the subject matter of this action pursuant to 28<br />U.S.C.§ 1330.<br /><br /><b><span style="color: blue;">2</span></b>. Venue properly exists in this district pursuant to 28 U.S.C. § 1391(f), based upon<br />the residence and status o f the parties, the events and omissions giving rise to the claims, and the<br />agreement which provides the basis for this action.<br /><br /><b><span style="color: blue;">3</span></b>. In addition, <b><span style="color: red;">Grenada irrevocably consented to the non-exclusive jurisdiction of</span></b><br /><b><span style="color: red;">any State or Federal Court in New York, </span></b>New York, to waive any objection to that venue on any<br />ground, and to accept service o f process by registered or certified mail to the notice address<br />provided in the agreements at issue.<br /><br /><b><span style="color: blue;">THE PARTIES</span></b><br /><br /><b><span style="color: blue;">4</span></b>. Ex-Im Bank is a banking institution organized and existing under the laws of the<br />Republic of China, with its principal place o f business in Taipei, the Republic of China. The<br />business of Ex-Im Bank includes the lending of money internationally.<br /><br /><b><span style="color: blue;">5</span></b>. Grenada is a foreign state as defined in 28 U.S.C. § 1603(a).<br /><br /><b><span style="color: blue;">BACKGROUND</span></b><br /><br /><b><span style="color: blue;">6.</span></b> Between 1990 and 2000, Ex-Im Bank and Grenada executed four loan agreements<br />by which Grenada borrowed a total o f $28,000,000 from Ex-Im Bank (the “Loan Agreements”).<br /><br /><b><span style="color: blue;">7.</span></b> On March 16, 2007, in an earlier action between the parties, Civil Action No. 06-<br />CV-2469(HB)(AJP), this Court entered an amended judgment in favor o f Ex-Im Bank and<br />against Grenada in the amount o f $21,586,057.38, plus pre-judgment interest, attorney’s fees and<br />statutory interest in connection with Grenada’s default on four multi-million dollar promissory<br />notes executed by Grenada in favor o f Ex-Im Bank pursuant to the Loan Agreements.<br /><br /><b><span style="color: blue;">8.</span></b> With post-judgment interest, Ex-Im Bank’s judgment against Grenada now stands<br />in excess of $32,000,000.<br /><br /><b><span style="color: blue;">9</span></b>. Almost six years later, Grenada has still not paid anything to Ex-Im Bank in<br />satisfaction o f the judgment.<br /><br /><b><span style="color: blue;">10</span></b>. S<b><span style="color: red;">ection 4.04 o f the Loan Agreement o f April 24, 1997 states, “Borrower’s</span></b><br /><b><span style="color: red;">obligations under this Agreement and the Note will at all times rank at least pari passu with</span></b><br /><b><span style="color: red;">Borrower’s any other External Indebtedness (direct or contingent) outstanding from time to</span></b><br /><b><span style="color: red;">time.”</span></b><br /><b><span style="color: red;"><br /></span></b><b><span style="color: blue;">11</span></b>. Section 4.04 o f the Loan Agreement o f October 1, 1997<b><span style="color: red;"> has identical language</span></b>.<br /><br /><b><span style="color: blue;">12</span></b>. Section 5.04 o f the Loan Agreement of July 27, 1990 has a <b><span style="color: red;">materially identical</span></b><br /><b><span style="color: red;">pari passu clause.</span></b><br /><br /><b><span style="color: blue;">13</span></b>. Section 5.01(d) of the Loan Agreement of January 21,2000 also has a<b><span style="color: red;"> materially</span></b><br /><b><span style="color: red;">identical pari passu clause.</span></b><br /><br /><b><span style="color: blue;">14</span></b>. The Loan Agreements also contain (see, e.g., Section 5.02 o f the April 24,1997<br />Loan Agreement (and similar provisions in the other Loan Agreements)) a negative covenant<br />that precludes Grenada, until Ex-Im Bank is paid in full, from permitting any obligation “to have<br />any priority or be subject to any preferential arrangement, whether or not constituting a security<br />agreement, in favor o f any creditor or class o f creditors, as to security, the repayment o f<br />principal and interest or the right to receive income or revenue.” (Emphasis added).<br /><br /><b><span style="color: blue;">15.</span></b> The Loan Agreements each define “External Indebtedness” as debt denominated<br />in a currency other than Grenada’s and payable to a nonresident of Grenada.<br /><br /><b><span style="color: blue;">16</span></b>. <b><span style="color: red;">According to their plain language, the pari passu clauses preclude Grenada from</span></b><br /><b><span style="color: red;">making a payment to a holder of External Indebtedness without making a ratable payment at the</span></b><br /><b><span style="color: red;">same time to Ex-Im Bank.</span></b><br /><b><span style="color: red;"><br /></span></b>3<br /><br /><b><span style="color: blue;">17.</span></b> In <b><span style="color: red;">2005, Grenada made an offer to restructure its commercial debt,</span></b> which most of<br />Grenada’s eligible external debtholders accepted.<br /><br /><b><span style="color: blue;">18</span></b>. According to its Offering Memorandum, Grenada’s debt restructuring involved an<br />exchange o f defaulted bonds—processed through J.P. Morgan Chase Bank, N.A. (“JPM”) in<br />New York, acting as Exchange Agent—for a series o f new bonds denominated in United States<br />dollars, governed by New York law, and issued pursuant to an indenture with JPM, as indenture<br />trustee.<br /><br /><b><span style="color: blue;">19.</span></b> In Grenada’s Offering Memorandum for that exchange, it stated plainly that<br />Grenada did not intend to pay any debt that elected not to restructure unless resources became<br />available to do so. In addition, Grenada stated that it did not intend to pay any amount in respect<br />of any debt that elected not to restructure if, at the time such payment is due, a payment default<br />then existed under any new bond issued in the exchange.<br /><br /><b><span style="color: blue;">20.</span></b> Ex-Im Bank did not participate in the restructuring.<br /><br /><b><span style="color: blue;">21</span></b>. Upon information and belief, Grenada also received debt relief from the Paris<br />Club in 2006, resulting in the rescheduling of its obligations to bilateral creditors including<br />Belgium, the United Kingdom, the United States, and France.<br /><br /><b><span style="color: blue;">22</span></b>. Upon information and belief, in connection with the 2005 and the Paris Club<br />restructurings,<b><span style="color: red;"> Grenada has been making substantial interest payments on its external debt for</span></b><br /><b><span style="color: red;">year</span></b>s, to the tune of over $43,000,000 (approximately $8,242,000 in 2008, $11,429,000 in 2009,<br />$11,478,000 in 2010, and $12,443,000 in 2011).<br /><br />4<br /><br /><b><span style="color: blue;">23</span></b>. <b><span style="color: red;">As recently as October 15,2012, Grenada paid a full interest payment to the</span></b><br /><b><span style="color: red;">holders of a $193,000,000 bond arising from the 2005 debt restructuring.</span></b><br /><br /><b><span style="color: blue;">24</span></b>.<b><span style="color: red;"> At least a portion of these payments are being made through Grenada’s paying</span></b><br /><b><span style="color: red;">agent, the Bank of New York Mellon (global headquarters at One Wall Street, New York, NY).</span></b><br /><br /><b><span style="color: blue;">25</span></b>. I<b><span style="color: red;">n a prospectus for the refinancing of Grenada treasury bills in November 2012,</span></b><br /><b><span style="color: red;">Grenada (1) claimed that it “has witnessed a remarkable recovery” </span></b>since Hurricanes Ivan and<br />Emily in 2004 and 2005; (2) highlighted its 2005 commercial debt restructuring, the debt relief it<br />received from the Paris Club, its years-long participation in IMF economic reform programs, and<br />its establishment of a Debt Management Unit within its Ministry of Finance; and (3)<b><span style="color: red;"> stated that it</span></b><br /><b><span style="color: red;">“has an exemplary record” of repaying all issues of treasury bills since Grenada’s entry into that</span></b><br /><b><span style="color: red;">market.</span></b><br /><b><span style="color: red;"><br /></span></b><b><span style="color: blue;">26.</span></b> In the earlier action between the parties, Grenada has made many efforts to evade<br />responsibility for its debts to Ex-Im Bank.<br /><br /><b><span style="color: blue;">27</span></b>. <b><span style="color: red;">Ex-Im Bank has been damaged as a result of Grenada’s violations o f the pari</span></b><br /><b><span style="color: red;">passu clauses and will continue to be damaged by the ongoing violations.</span></b><br /><b><span style="color: red;"><br /></span></b><b><span style="color: blue;">CLAIM FOR SPECIFIC ENFORCEMENT OF THE PARI PASSU CLAUSES AND THE</span></b><br /><b><span style="color: blue;">NEGATIVE COVENANT FOR INJUNCTIVE RELIEF</span></b><br /><br /><b><span style="color: blue;">28</span></b>. Ex-Im Bank repeats and re-alleges the allegations set forth in paragraphs 1<br />through 25 herein.<br /><br /><b><span style="color: blue;">29.</span></b> Pursuant to the pari passu clauses of the Loan Agreements, Grenada guaranteed<br />that, “Borrower’s obligations under this Agreement and the Note will at all times rank at least<br /><br />5<br /><br />pari passu with Borrower’s any other External Indebtedness (direct or contingent) outstanding<br />from time to time.”<br /><br /><b><span style="color: blue;">30</span></b>. Grenada, therefore, may not make any payment of its External Indebtedness<br />without also making a ratable payment at the same time to Ex-Im Bank.<br /><br /><b><span style="color: blue;">31</span></b>. Pursuant to the negative covenant, described in paragraph 14 above, Grenada<br />promised not to enter into any “preferential arrangement” with any “class o f creditors” as to “the<br />repayment of principal and interest.”<br /><br /><b><span style="color: blue;">32</span></b>. Grenada, therefore, may not enter into any agreement other creditors under which<br />it prefers those creditors as to the payment of principal and interest above its obligation to pay<br />Ex-Im Bank.<br /><br /><b><span style="color: blue;">33</span></b>.<b><span style="color: red;"> Grenada’s past payments to holders of its other External Indebtedness, while</span></b><br /><b><span style="color: red;">paying nothing to Ex-Im Bank, violated the pari passu clauses and its negative covenant not to</span></b><br /><b><span style="color: red;">prefer other creditors over Ex-Im Bank with respect to the repayment o f principal and interest.</span></b><br /><b><span style="color: red;"><br /></span></b><b><span style="color: blue;">34</span><span style="color: red;">. Grenada’s continuing payments to holders of its other External Indebtedness,</span></b><br /><b><span style="color: red;">without making any payments to Ex-Im Bank, will be ongoing violations o f the pari passu</span></b><br /><b><span style="color: red;">clauses and its negative covenant against granting preferences in payment to other creditors.</span></b><br /><br /><b><span style="color: blue;">35.</span></b> Ex-Im Bank has suffered irreparable injury from Grenada’s <b><span style="color: red;">violation of the pari</span></b><br /><b><span style="color: red;">passu clauses </span></b>and will continue to suffer such injury unless the Court specifically enforces the<br />clauses with a mandatory injunction requiring Grenada to pay Ex-Im Bank ratably whenever it<br />makes payments on its other External Indebtedness.<br /><br />6<br /><br />36. Remedies available at law are inadequate to compensate for such injury.<br /><br /><b><span style="color: blue;">37</span></b>. Ex-Im Bank has performed its part of the Loan Agreements with Grenada.<br /><br /><b><span style="color: blue;">38</span></b>. The balance of equities tips overwhelmingly toward the issuance o f an injunction.<br /><br /><b><span style="color: blue;">39</span></b>. The public interest would not be harmed by the issuance of a permanent<br />injunction.<br />WHEREFORE, Ex-Im Bank demands judgment against Grenada (1) specifically<br />enforcing the pari passu clauses and the negative covenant against granting preferential payment<br />arrangements to other creditors, and (2) awarding Ex-Im Bank its costs, prejudgment interest,<br />attorneys’ fees and such other and further relief as the Court shall deem just and proper.<br />Dated: New York, New York SULLIVAN & WORCESTER LLP<br /><br />March 4,2013<br />Paul E. Summit<br />Andrew T. Solomon<br />1633 Broadway<br />New York, NY 10019<br />T. 212.660.3000<br />F. 212.660.3001<br />Attorneys for Plaintiff/Judgment Creditor The Export-<br />Import Bank o f the Republic o f China<br />7</div>
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Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-9065886364199653010.post-81075672670828525372013-03-10T00:16:00.001-08:002013-03-10T00:16:28.014-08:00hier gehts Grenada pari passu mässig an den Kragen....<br />
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<a href="http://rolfsgriechenlandblog.blogspot.de/2013/03/hier-gehts-grenada-pari-passu-massig.html" style="color: #ff1900; text-decoration: none;">hier gehts Grenada pari passu mässig an den Kragen....</a></h3>
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<a href="http://rolfjkoch.blogspot.de/2013/03/hier-gehts-grenada-pari-passu-massig.html" style="color: #33aaff; text-decoration: none;">hier gehts Grenada pari passu mässig an den Kragen....</a></h3>
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<br /><b><span style="color: blue;">PLAINTIFF(S) ADDRESS(ES) AND COUNTY(IES)</span></b><br />The Export-Import Bank of the Republic of China<br />3 Nanhai Road, 8th Floor<br />Taipei (100) Taiwan<br />Republic of China<br /><br /><b><span style="color: blue;">DEFENDANT(S) ADDRESS(ES) AND COUNTY(IES)</span></b><br />Grenada<br />Ministry of Finance<br />Financial Complex<br />Carenage, St. George's, Grenada<br /><br /><br />Paul E. Summit<br />Andrew T. Solomon<br />SULLIVAN & WORCESTER LLP<br />1633 Broadway<br />New York, NY 10019<br />(212)660-3000<br />Attorneys fo r Plaintiff/Judgment Creditor<br /><br />UNITED STATES DISTRICT COURT<br />SOUTHERN DISTRICT OF NEW YORK<br />THE EXPORT-IMPORT BANK OF<br />THE REPUBLIC OF CHINA,<br />-X<br />Plaintiff/Judgment Creditor,<br />-against-<br />GRENADA,<br />Defendant/Judgment Debtor.<br />-X<br />i l<br />Civil Action No:<br />COMPLAINT<br />Ca í<br />•'C<br />I<br />Plaintiff The Export-Import Bank of the Republic of China (“Ex-Im Bank”), by its-*7"<br />—<br />attorneys, Sullivan & Worcester LLP, complains of the defendant Grenada as follows^<br />• ••<br /><br /><b><span style="color: blue;">JURISDICTION AND VENUE o '</span></b><br /><br /><b><span style="color: blue;">I</span></b>. This court has jurisdiction over the subject matter of this action pursuant to 28<br />U.S.C.§ 1330.<br /><br /><b><span style="color: blue;">2</span></b>. Venue properly exists in this district pursuant to 28 U.S.C. § 1391(f), based upon<br />the residence and status o f the parties, the events and omissions giving rise to the claims, and the<br />agreement which provides the basis for this action.<br /><br /><b><span style="color: blue;">3</span></b>. In addition, <b><span style="color: red;">Grenada irrevocably consented to the non-exclusive jurisdiction of</span></b><br /><b><span style="color: red;">any State or Federal Court in New York, </span></b>New York, to waive any objection to that venue on any<br />ground, and to accept service o f process by registered or certified mail to the notice address<br />provided in the agreements at issue.<br /><br /><b><span style="color: blue;">THE PARTIES</span></b><br /><br /><b><span style="color: blue;">4</span></b>. Ex-Im Bank is a banking institution organized and existing under the laws of the<br />Republic of China, with its principal place o f business in Taipei, the Republic of China. The<br />business of Ex-Im Bank includes the lending of money internationally.<br /><br /><b><span style="color: blue;">5</span></b>. Grenada is a foreign state as defined in 28 U.S.C. § 1603(a).<br /><br /><b><span style="color: blue;">BACKGROUND</span></b><br /><br /><b><span style="color: blue;">6.</span></b> Between 1990 and 2000, Ex-Im Bank and Grenada executed four loan agreements<br />by which Grenada borrowed a total o f $28,000,000 from Ex-Im Bank (the “Loan Agreements”).<br /><br /><b><span style="color: blue;">7.</span></b> On March 16, 2007, in an earlier action between the parties, Civil Action No. 06-<br />CV-2469(HB)(AJP), this Court entered an amended judgment in favor o f Ex-Im Bank and<br />against Grenada in the amount o f $21,586,057.38, plus pre-judgment interest, attorney’s fees and<br />statutory interest in connection with Grenada’s default on four multi-million dollar promissory<br />notes executed by Grenada in favor o f Ex-Im Bank pursuant to the Loan Agreements.<br /><br /><b><span style="color: blue;">8.</span></b> With post-judgment interest, Ex-Im Bank’s judgment against Grenada now stands<br />in excess of $32,000,000.<br /><br /><b><span style="color: blue;">9</span></b>. Almost six years later, Grenada has still not paid anything to Ex-Im Bank in<br />satisfaction o f the judgment.<br /><br /><b><span style="color: blue;">10</span></b>. S<b><span style="color: red;">ection 4.04 o f the Loan Agreement o f April 24, 1997 states, “Borrower’s</span></b><br /><b><span style="color: red;">obligations under this Agreement and the Note will at all times rank at least pari passu with</span></b><br /><b><span style="color: red;">Borrower’s any other External Indebtedness (direct or contingent) outstanding from time to</span></b><br /><b><span style="color: red;">time.”</span></b><br /><b><span style="color: red;"><br /></span></b><b><span style="color: blue;">11</span></b>. Section 4.04 o f the Loan Agreement o f October 1, 1997<b><span style="color: red;"> has identical language</span></b>.<br /><br /><b><span style="color: blue;">12</span></b>. Section 5.04 o f the Loan Agreement of July 27, 1990 has a <b><span style="color: red;">materially identical</span></b><br /><b><span style="color: red;">pari passu clause.</span></b><br /><br /><b><span style="color: blue;">13</span></b>. Section 5.01(d) of the Loan Agreement of January 21,2000 also has a<b><span style="color: red;"> materially</span></b><br /><b><span style="color: red;">identical pari passu clause.</span></b><br /><br /><b><span style="color: blue;">14</span></b>. The Loan Agreements also contain (see, e.g., Section 5.02 o f the April 24,1997<br />Loan Agreement (and similar provisions in the other Loan Agreements)) a negative covenant<br />that precludes Grenada, until Ex-Im Bank is paid in full, from permitting any obligation “to have<br />any priority or be subject to any preferential arrangement, whether or not constituting a security<br />agreement, in favor o f any creditor or class o f creditors, as to security, the repayment o f<br />principal and interest or the right to receive income or revenue.” (Emphasis added).<br /><br /><b><span style="color: blue;">15.</span></b> The Loan Agreements each define “External Indebtedness” as debt denominated<br />in a currency other than Grenada’s and payable to a nonresident of Grenada.<br /><br /><b><span style="color: blue;">16</span></b>. <b><span style="color: red;">According to their plain language, the pari passu clauses preclude Grenada from</span></b><br /><b><span style="color: red;">making a payment to a holder of External Indebtedness without making a ratable payment at the</span></b><br /><b><span style="color: red;">same time to Ex-Im Bank.</span></b><br /><b><span style="color: red;"><br /></span></b>3<br /><br /><b><span style="color: blue;">17.</span></b> In <b><span style="color: red;">2005, Grenada made an offer to restructure its commercial debt,</span></b> which most of<br />Grenada’s eligible external debtholders accepted.<br /><br /><b><span style="color: blue;">18</span></b>. According to its Offering Memorandum, Grenada’s debt restructuring involved an<br />exchange o f defaulted bonds—processed through J.P. Morgan Chase Bank, N.A. (“JPM”) in<br />New York, acting as Exchange Agent—for a series o f new bonds denominated in United States<br />dollars, governed by New York law, and issued pursuant to an indenture with JPM, as indenture<br />trustee.<br /><br /><b><span style="color: blue;">19.</span></b> In Grenada’s Offering Memorandum for that exchange, it stated plainly that<br />Grenada did not intend to pay any debt that elected not to restructure unless resources became<br />available to do so. In addition, Grenada stated that it did not intend to pay any amount in respect<br />of any debt that elected not to restructure if, at the time such payment is due, a payment default<br />then existed under any new bond issued in the exchange.<br /><br /><b><span style="color: blue;">20.</span></b> Ex-Im Bank did not participate in the restructuring.<br /><br /><b><span style="color: blue;">21</span></b>. Upon information and belief, Grenada also received debt relief from the Paris<br />Club in 2006, resulting in the rescheduling of its obligations to bilateral creditors including<br />Belgium, the United Kingdom, the United States, and France.<br /><br /><b><span style="color: blue;">22</span></b>. Upon information and belief, in connection with the 2005 and the Paris Club<br />restructurings,<b><span style="color: red;"> Grenada has been making substantial interest payments on its external debt for</span></b><br /><b><span style="color: red;">year</span></b>s, to the tune of over $43,000,000 (approximately $8,242,000 in 2008, $11,429,000 in 2009,<br />$11,478,000 in 2010, and $12,443,000 in 2011).<br /><br />4<br /><br /><b><span style="color: blue;">23</span></b>. <b><span style="color: red;">As recently as October 15,2012, Grenada paid a full interest payment to the</span></b><br /><b><span style="color: red;">holders of a $193,000,000 bond arising from the 2005 debt restructuring.</span></b><br /><br /><b><span style="color: blue;">24</span></b>.<b><span style="color: red;"> At least a portion of these payments are being made through Grenada’s paying</span></b><br /><b><span style="color: red;">agent, the Bank of New York Mellon (global headquarters at One Wall Street, New York, NY).</span></b><br /><br /><b><span style="color: blue;">25</span></b>. I<b><span style="color: red;">n a prospectus for the refinancing of Grenada treasury bills in November 2012,</span></b><br /><b><span style="color: red;">Grenada (1) claimed that it “has witnessed a remarkable recovery” </span></b>since Hurricanes Ivan and<br />Emily in 2004 and 2005; (2) highlighted its 2005 commercial debt restructuring, the debt relief it<br />received from the Paris Club, its years-long participation in IMF economic reform programs, and<br />its establishment of a Debt Management Unit within its Ministry of Finance; and (3)<b><span style="color: red;"> stated that it</span></b><br /><b><span style="color: red;">“has an exemplary record” of repaying all issues of treasury bills since Grenada’s entry into that</span></b><br /><b><span style="color: red;">market.</span></b><br /><b><span style="color: red;"><br /></span></b><b><span style="color: blue;">26.</span></b> In the earlier action between the parties, Grenada has made many efforts to evade<br />responsibility for its debts to Ex-Im Bank.<br /><br /><b><span style="color: blue;">27</span></b>. <b><span style="color: red;">Ex-Im Bank has been damaged as a result of Grenada’s violations o f the pari</span></b><br /><b><span style="color: red;">passu clauses and will continue to be damaged by the ongoing violations.</span></b><br /><b><span style="color: red;"><br /></span></b><b><span style="color: blue;">CLAIM FOR SPECIFIC ENFORCEMENT OF THE PARI PASSU CLAUSES AND THE</span></b><br /><b><span style="color: blue;">NEGATIVE COVENANT FOR INJUNCTIVE RELIEF</span></b><br /><br /><b><span style="color: blue;">28</span></b>. Ex-Im Bank repeats and re-alleges the allegations set forth in paragraphs 1<br />through 25 herein.<br /><br /><b><span style="color: blue;">29.</span></b> Pursuant to the pari passu clauses of the Loan Agreements, Grenada guaranteed<br />that, “Borrower’s obligations under this Agreement and the Note will at all times rank at least<br /><br />5<br /><br />pari passu with Borrower’s any other External Indebtedness (direct or contingent) outstanding<br />from time to time.”<br /><br /><b><span style="color: blue;">30</span></b>. Grenada, therefore, may not make any payment of its External Indebtedness<br />without also making a ratable payment at the same time to Ex-Im Bank.<br /><br /><b><span style="color: blue;">31</span></b>. Pursuant to the negative covenant, described in paragraph 14 above, Grenada<br />promised not to enter into any “preferential arrangement” with any “class o f creditors” as to “the<br />repayment of principal and interest.”<br /><br /><b><span style="color: blue;">32</span></b>. Grenada, therefore, may not enter into any agreement other creditors under which<br />it prefers those creditors as to the payment of principal and interest above its obligation to pay<br />Ex-Im Bank.<br /><br /><b><span style="color: blue;">33</span></b>.<b><span style="color: red;"> Grenada’s past payments to holders of its other External Indebtedness, while</span></b><br /><b><span style="color: red;">paying nothing to Ex-Im Bank, violated the pari passu clauses and its negative covenant not to</span></b><br /><b><span style="color: red;">prefer other creditors over Ex-Im Bank with respect to the repayment o f principal and interest.</span></b><br /><b><span style="color: red;"><br /></span></b><b><span style="color: blue;">34</span><span style="color: red;">. Grenada’s continuing payments to holders of its other External Indebtedness,</span></b><br /><b><span style="color: red;">without making any payments to Ex-Im Bank, will be ongoing violations o f the pari passu</span></b><br /><b><span style="color: red;">clauses and its negative covenant against granting preferences in payment to other creditors.</span></b><br /><br /><b><span style="color: blue;">35.</span></b> Ex-Im Bank has suffered irreparable injury from Grenada’s <b><span style="color: red;">violation of the pari</span></b><br /><b><span style="color: red;">passu clauses </span></b>and will continue to suffer such injury unless the Court specifically enforces the<br />clauses with a mandatory injunction requiring Grenada to pay Ex-Im Bank ratably whenever it<br />makes payments on its other External Indebtedness.<br /><br />6<br /><br />36. Remedies available at law are inadequate to compensate for such injury.<br /><br /><b><span style="color: blue;">37</span></b>. Ex-Im Bank has performed its part of the Loan Agreements with Grenada.<br /><br /><b><span style="color: blue;">38</span></b>. The balance of equities tips overwhelmingly toward the issuance o f an injunction.<br /><br /><b><span style="color: blue;">39</span></b>. The public interest would not be harmed by the issuance of a permanent<br />injunction.<br />WHEREFORE, Ex-Im Bank demands judgment against Grenada (1) specifically<br />enforcing the pari passu clauses and the negative covenant against granting preferential payment<br />arrangements to other creditors, and (2) awarding Ex-Im Bank its costs, prejudgment interest,<br />attorneys’ fees and such other and further relief as the Court shall deem just and proper.<br />Dated: New York, New York SULLIVAN & WORCESTER LLP<br /><br />March 4,2013<br />Paul E. Summit<br />Andrew T. Solomon<br />1633 Broadway<br />New York, NY 10019<br />T. 212.660.3000<br />F. 212.660.3001<br />Attorneys for Plaintiff/Judgment Creditor The Export-<br />Import Bank o f the Republic o f China<br />7</div>
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Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-9065886364199653010.post-78474281938023263152013-03-06T16:16:00.001-08:002013-03-06T16:16:40.668-08:00Pari passu, the cross-sovereign contamination // Some excerpts from a lawsuit filed by the Export-Import Bank of China (Taipei) against Grenada in a United States district court on March 4, 2013…<br />
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<span class="meta-divider" style="padding: 0px 4px;">| </span><span class="entry-date">Mar 06 18:16</span> <span class="meta-divider" style="padding: 0px 4px;">| </span><a href="http://ftalphaville.ft.com/2013/03/06/1412972/pari-passu-the-cross-sovereign-contamination/#respond" infernoref="24_1412972" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">2 comments </a><span class="meta-divider" style="padding: 0px 4px;">| </span><span class="social-links-popup linkButton small" style="display: inline; position: relative;"><a class="white shareButton overlayButton" href="http://www.blogger.com/blogger.g?blogID=3030891296885816884" style="-webkit-font-smoothing: antialiased; background-image: url(http://im.ft-static.com/m/img/button_sprite.png); border-width: 0px; color: #2e6e9e; text-decoration: none;"><span style="background-image: url(http://im.ft-static.com/m/img/button_sprite.png); color: white; cursor: pointer; display: inline-block; line-height: 15px; padding: 1px 4px 0px;">Share</span></a><div class="shareList roundedCorners overlay" style="background-image: url(http://im.ft-static.com/m/img/overlayBg.png); border-bottom-left-radius: 4px; border-bottom-right-radius: 4px; border-top-left-radius: 4px; border-top-right-radius: 4px; left: -9999px; margin-left: -65px; margin-top: 16px; padding: 4px; position: absolute; width: 170px; z-index: 1;">
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Part of the <span class="tag-name" style="background-image: url(http://ftalphaville.ft.com/wp-content/themes/wrapper-alphaville/img/show-more.png); background-position: 6px -115px; background-repeat: no-repeat no-repeat; cursor: pointer; display: inline-block; font-weight: bold; padding: 0px 0px 0px 18px; text-transform: uppercase;">PARI PASSU SAGA SERIES</span></div>
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<b><span style="color: red;">Some excerpts from a <a href="http://ftalphaville.ft.com/files/2013/03/13cv014501.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #888888; text-decoration: none;" target="_blank" title="Ex-Im Bank of Republic of China v Grenada">lawsuit </a>filed by the Export-Import Bank of China (Taipei) against Grenada in a United States district court on March 4, 2013…</span></b></div>
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If you have been following the pari passu saga on ratable payment of sovereign debt — they tell their own story. (Click to enlarge all images.)</div>
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<strong>1.) Ex-Im Bank already has a judgement on $32m of debt defaulted on by Grenada.</strong></div>
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<a href="http://ftalphaville.ft.com/files/2013/03/Grenada1.png" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank"><img alt="" class="alignnone wp-image-1412982" height="360" src="http://ftalphaville.ft.com/files/2013/03/Grenada1-590x450.png" style="-webkit-box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; background-color: white; background-position: initial initial; background-repeat: initial initial; border: none; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; max-width: 100%; padding: 5px; position: relative;" width="472" /></a></div>
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<strong>2.) The loan debt had a pari passu clause, and negative pledge language.</strong></div>
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<a href="http://ftalphaville.ft.com/files/2013/03/Grenada2.png" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank"><img alt="" class="alignnone size-full wp-image-1412992" height="690" src="http://ftalphaville.ft.com/files/2013/03/Grenada2.png" style="-webkit-box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; background-color: white; background-position: initial initial; background-repeat: initial initial; border: none; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; max-width: 100%; padding: 5px; position: relative;" width="532" /></a></div>
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<strong>3.) Let’s just spell that last bit out, as cited by Ex-Im Bank.</strong></div>
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According to their plain language, the pari passu clauses preclude Grenada from making a ratable payment to a holder of External Indebtedness without making a ratable payment at the same time to Ex-Im Bank.</div>
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<strong>4.) Ex-Im Bank stayed out of Grenada’s 2005 debt restructuring.</strong></div>
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<a href="http://ftalphaville.ft.com/files/2013/03/Grenada3.png" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank"><img alt="" class="alignnone wp-image-1413012" height="379" src="http://ftalphaville.ft.com/files/2013/03/Grenada3-590x474.png" style="-webkit-box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; background-color: white; background-position: initial initial; background-repeat: initial initial; border: none; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; max-width: 100%; padding: 5px; position: relative;" width="472" /></a></div>
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<strong>5.) It has been watching Grenada pay the people who did restructure.</strong></div>
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<a href="http://ftalphaville.ft.com/files/2013/03/Grenada4.png" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank"><img alt="" class="alignnone size-large wp-image-1413022" height="217" src="http://ftalphaville.ft.com/files/2013/03/Grenada4-590x217.png" style="-webkit-box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; background-color: white; background-position: initial initial; background-repeat: initial initial; border: none; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; max-width: 100%; padding: 5px; position: relative;" width="590" /></a></div>
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<strong>6.) Bank of New York handled some of that dough. Bank of New York lives in New York.</strong></div>
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<a href="http://ftalphaville.ft.com/files/2013/03/Grenada5.png" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank"><img alt="" class="alignnone size-large wp-image-1413032" height="74" src="http://ftalphaville.ft.com/files/2013/03/Grenada5-590x74.png" style="-webkit-box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; background-color: white; background-position: initial initial; background-repeat: initial initial; border: none; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; max-width: 100%; padding: 5px; position: relative;" width="590" /></a></div>
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<strong>7.) Ex-Im Bank is now coming after these payments to Grenada’s restructured bondholders. (Hello, intercreditor consequences of ratable payment.)</strong></div>
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<a href="http://ftalphaville.ft.com/files/2013/03/Grenada6.png" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank"><img alt="" class="alignnone size-large wp-image-1413042" height="380" src="http://ftalphaville.ft.com/files/2013/03/Grenada6-590x380.png" style="-webkit-box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; background-color: white; background-position: initial initial; background-repeat: initial initial; border: none; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; max-width: 100%; padding: 5px; position: relative;" width="590" /></a></div>
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<strong>8.) And Ex-Im Bank’s citing equity.</strong></div>
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<a href="http://ftalphaville.ft.com/files/2013/03/Grenada7.png" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank"><img alt="" class="alignnone size-large wp-image-1413052" height="116" src="http://ftalphaville.ft.com/files/2013/03/Grenada7-590x116.png" style="-webkit-box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; background-color: white; background-position: initial initial; background-repeat: initial initial; border: none; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; max-width: 100%; padding: 5px; position: relative;" width="590" /></a></div>
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They didn’t even wait for a final Second Circuit ruling on Argentina making ratable payments to its holdouts. (Why should they, actually? The implications of ratable payment are <a href="http://ftalphaville.ft.com/2012/12/14/1304192/tom-dick-and-harry-in-rome/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Tom, Dick and Harry in Rome - FT Alphaville">arguably clear</a>.)</div>
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Incidentally observe point<strong> 1) </strong>there, that Ex-Im Bank is exploring this avenue having already won judgement against Grenada. (The story of their dispute is <a href="http://cananewsonline.com/news/3684-regional-leaders-give-support-to-grenada.html" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Regional Leaders give support to Grenada - Cana News (2012)">a long one</a>.)</div>
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The $1.3bn of claims involved in NML’s pari passu litigation against Argentina were not judgement debts. Nevertheless. EM Ltd, which holds a prior judgement against Argentina, said (in a pro-holdout <a href="http://www.shearman.com/files/upload/NML-Capital-v-Argentina-2013-1-4-Brief-of-Robert-Mann-and-EM-Ltd.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Brief of Robert Mann and EM Ltd - Shearman">amicus brief</a>) that while “the District Court has not yet been asked to address whether the Equal Treatment Provision can be used to enforce an existing judgment,” EM Ltd “believes that the Equal Treatment Provision applies with identical force in the post-judgment context”.</div>
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And now we have crossed into new territory.</div>
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The "trial of the century" in sovereign debt restructuring, in our humble opinion. The story of Argentina, its holdout creditors, the grande finale (or is it?) of their battle in US courts.</div>
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<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/03/04/1406892/repent-argentina-said-the-ticktock-judges-part-two/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">"Repent, Argentina!" said the ticktock judges (part two)</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/03/06/1411442/raising-the-rufo-in-argentine-bonds/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Raising the RUFO in Argentine bonds</a></li>
<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2013/03/06/1412972/pari-passu-the-cross-sovereign-contamination/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Pari passu, the cross-sovereign contamination</a></li>
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This entry was posted by <a href="http://ftalphaville.ft.com/meet-the-team/joseph-cotterill/" rel="author" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" title="Posts by Joseph Cotterill">Joseph Cotterill</a> on <time class="entry-date" pubdate="" style="display: inline;">Wednesday March 6th, 2013 18:16</time>. Tagged with<a href="http://ftalphaville.ft.com/tag/argentina/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Argentina</a>, <a href="http://ftalphaville.ft.com/tag/debt-restructuring/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Debt Restructuring</a>, <a href="http://ftalphaville.ft.com/tag/grenada/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Grenada</a>, <a href="http://ftalphaville.ft.com/tag/pari-passu-saga/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Pari Passu Saga</a>, <a href="http://ftalphaville.ft.com/tag/sovereign-debt/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Sovereign Debt</a>.</div>
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<span style="color: blue; font-family: Arial, Helvetica, sans-serif;"><span style="line-height: 24px;"><b><a href="http://ftalphaville.ft.com/2013/03/06/1412972/pari-passu-the-cross-sovereign-contamination/" style="color: #888888; text-decoration: none;">http://ftalphaville.ft.com/2013/03/06/1412972/pari-passu-the-cross-sovereign-contamination/</a></b></span></span></div>
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Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-9065886364199653010.post-53530677480449985092013-03-03T10:12:00.001-08:002013-03-03T10:12:22.124-08:00einiges was wir schon immer über pari passu wissen wolten....<br />
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<a href="http://rolfsgriechenlandblog.blogspot.de/2013/03/einiges-was-wir-schon-immer-uber-pari.html" style="color: #888888; text-decoration: none;">einiges was wir schon immer über pari passu wissen wolten....</a></h3>
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<a href="http://ftalphaville.ft.com/2012/12/06/1298193/all-of-this-has-happened-before-and-will-happen-again-sovereign-pari-passu-edition/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: black; text-decoration: none;">All of this has happened before and will happen again, sovereign pari passu edition</a></h1>
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<span class="meta-divider" style="padding: 0px 4px;">| </span><span class="entry-date">Dec 06 2012 17:40</span> <span class="meta-divider" style="padding: 0px 4px;">| </span><a href="http://ftalphaville.ft.com/2012/12/06/1298193/all-of-this-has-happened-before-and-will-happen-again-sovereign-pari-passu-edition/#respond" infernoref="24_1298193" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">5 comments </a><span class="meta-divider" style="padding: 0px 4px;">| </span><span class="social-links-popup linkButton small" style="display: inline; position: relative;"><a class="white shareButton overlayButton" href="http://www.blogger.com/blogger.g?blogID=3030891296885816884" style="-webkit-font-smoothing: antialiased; background-image: url(http://im.ft-static.com/m/img/button_sprite.png); border-width: 0px; color: #2e6e9e; text-decoration: none;"><span style="background-image: url(http://im.ft-static.com/m/img/button_sprite.png); color: white; cursor: pointer; display: inline-block; line-height: 15px; padding: 1px 4px 0px;">Share</span></a><div class="shareList roundedCorners overlay" style="background-image: url(http://im.ft-static.com/m/img/overlayBg.png); border-bottom-left-radius: 4px; border-bottom-right-radius: 4px; border-top-left-radius: 4px; border-top-right-radius: 4px; left: -9999px; margin-left: -65px; margin-top: 16px; padding: 4px; position: absolute; width: 170px; z-index: 1;">
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Part of the <span class="tag-name" style="background-image: url(http://ftalphaville.ft.com/wp-content/themes/wrapper-alphaville/img/show-more.png); background-position: 6px -115px; background-repeat: no-repeat no-repeat; cursor: pointer; display: inline-block; font-weight: bold; padding: 0px 0px 0px 18px; text-transform: uppercase;">PARI PASSU SAGA SERIES</span></div>
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On October 26, the Second Circuit <a href="http://www.ca2.uscourts.gov/decisions/isysquery/698b4d40-9200-4c40-957f-c2bdf0a6374d/1/doc/12-105_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/698b4d40-9200-4c40-957f-c2bdf0a6374d/1/hilite/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="NML v Argentina - Second Circuit of the US Court of Appeals">chucked out</a> Argentina’s appeal against having to pay bond holdouts, having had “little difficulty concluding” that the defaulted debt’s dusty, old — but contractually standard — pari passu clause demanded rateable payment.</div>
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From that day forth, the world of restructuring sovereign debt – and writing sovereign debt contracts – was shaken. Maybe even changed forever. Certainly for the New York law part of that world, if not so much (<em>or not yet</em>) English law.</div>
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At the very least this might be considered an opportune moment to tweak the boilerplate sovereign pari passu clause. It is after all <a href="http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/intfinr10&div=227&id=&page=" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="The Pari Passu Clause Sub Specie Aeternitatis - Lee C. Buchheit (1991)">famously ambiguous</a>, <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1633439" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Origin Myths, Contracts, and the Hunt for Pari Passu - Weidermaier, Scott and Gulati via SSRN">historically obscure</a>, and the version at fault in the Second Circuit ruling is not a cross <a href="http://www.creditslips.org/creditslips/2012/11/argentinas-not-so-unusual-pari-passu-clause.html" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Argentina's (not so) unusual pari passu clause - Credit Slips">uniquely borne</a> by the Republic of Argentina.</div>
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Chart via CreditSlips:</div>
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<a href="http://ftalphaville.ft.com/files/2012/12/CreditSlips_pari_passu.png" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank"><img alt="" class="alignnone wp-image-1300471" height="309" src="http://ftalphaville.ft.com/files/2012/12/CreditSlips_pari_passu-590x442.png" style="-webkit-box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; background-color: white; background-position: initial initial; background-repeat: initial initial; border: none; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; max-width: 100%; padding: 5px; position: relative;" width="413" /></a></div>
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Well, who told these sovereigns…</div>
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<strong><a href="http://ftalphaville.ft.com/files/2012/12/Ivory-Coast-pari.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Ivory Coast bond contract">Ivory Coast </a></strong>(November 30 reopening of 2032 bonds, governed by New York law):</div>
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The Securities are unsecured. The Securities constitute direct, general, unconditional and unsecured and unsubordinated obligations of the Republic ranking pari passu, without any preference among themselves with all other outstanding, unsecured and unsubordinated obligations, present and future, of the Republic.</div>
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<strong><a href="http://ftalphaville.ft.com/files/2012/12/Serbia-pari.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Serbia bond contract">Serbia</a> </strong>(November 19 issue of 2017 bonds, governed by English law):</div>
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The Notes will constitute direct, unconditional and (subject to the provisions of a negative pledge covenant described below) unsecured obligations of the Issuer. The Notes rank and will rank pari passu among themselves and at least pari passu in right of payment with all other present and future unsecured obligations of the Issuer, save only for such obligations as may be preferred by mandatory provisions of applicable law. The full faith and credit of the Issuer is pledged to the due and punctual payment of all amounts due in respect of the Notes.</div>
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<strong><a href="http://ftalphaville.ft.com/files/2012/12/Mongolia-pari.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Mongolia bond contract">Mongolia</a> </strong>(November 21 medium-term note programme, New York law):</div>
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The Notes and any relative Receipts and Coupons are direct, unconditional, unsubordinated and (subject to the provisions of Condition 4) unsecured obligations of the Issuer and rank and will rank pari passu, without preference among themselves, with all other unsecured and unsubordinated External Indebtedness (as defined in Condition 10) of the Issuer, from time to time outstanding.</div>
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<strong><a href="http://ftalphaville.ft.com/files/2012/12/Costa-Rica-pari.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Costa Rica bond contract">Costa Rica</a> </strong>(November 16 issue of 2023 bonds, New York law):</div>
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The Notes will constitute general, direct, unconditional and unsecured Public External Indebtedness of the Republic and will rank pari passu in right of payment, without any preference among themselves, with all unsecured and unsubordinated obligations of the Republic, present and future, relating to Public External Indebtedness of the Republic. The Republic has pledged its full faith and credit for the due and punctual payment of all amounts due in respect of the Notes.</div>
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<strong><a href="http://ftalphaville.ft.com/files/2012/12/Ukraine-pari.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Ukraine bond contract">Ukraine</a> </strong>(November 26 issue of 2022 bonds, English law):</div>
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The Notes constitute direct, unconditional and, subject to the provisions of Condition 3 (Negative Pledge), unsecured obligations of the Issuer and (subject as aforesaid) rank pari passu without any preference among themselves. The payment obligations of the Issuer under the Notes shall rank at least pari passu with all other unsecured and unsubordinated obligations of the Issuer, present and future, save only for such obligations as may be preferred by mandatory provisions of applicable law.</div>
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<strong><a href="http://www.shearman.com/files/upload/Fiscal-Agency-Agreement.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Fiscal Agency Agreement 1994, Argentina - via Shearman & Sterling">Argentina</a> </strong>(1994 Fiscal Agency Agreement, the “FAA bonds”, New York law):</div>
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The Securities will constitute (except as provided in Section 11 below) direct, unconditional, unsecured and unsubordinated obligations of the Republic and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Republic under the Securities shall at all times rank at least equally with all its other present and future unsecured and unsubordinated External Indebtedness (as defined in this Agreement).</div>
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Spot the differences.</div>
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That’s a selection of pari passu clauses in prospectuses for sovereign debt issued in the six weeks or so since the Second Circuit ruling. Plus, for reference, the clause in the original Argentine holdout debt.</div>
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We’re grateful to Mitu Gulati, law professor at Duke University, for gathering together these new bond issues. Gulati also makes a very interesting point: these clauses do not show sudden change. They are not markedly different to ones used before the Argentina litigation exploded on to the front pages.</div>
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What’s more, a few governments have even recycled the very ‘payments’ language which got Argentina into so much hot water with the Second Circuit. (Others’ clauses stick to somewhat blander – safer? – ‘ranking’ language, which could support a view that the clauses only promise equal legal ranking of creditors.)</div>
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In a ruling which every sovereign debt lawyer in the business would have carefully noted, the Second Circuit decided that the second, “payment obligations” sentence of the Argentine clause “prohibits Argentina, as bond <em>payor</em>, from paying on other bonds without paying on the FAA Bonds.” That is a challenge to the reigning “equal ranking” interpretation, and a potentially fatal chink in a defaulting sovereign’s armour. And it’s back in bond issues as if nothing had happened.</div>
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That’s pretty extraordinary.</div>
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But the real question is where this overall inertia in pari passu language is coming from. A bit like the pari passu clause itself, it is kind of a mystery. Or is it?</div>
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Maybe the sovereigns don’t want change.</div>
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Maybe they just like the way things have been done and drafted before, or dislike being associated with novelty. Ivory Coast was reopening an old bond, for example, while Mongolia and Costa Rica aren’t names you see in the market every day. Similarly, if those pari passu clauses bearing ‘ranking’-heavy wording aren’t obviously broke, why fix them? Holdout nastygrams featuring the pari passu clause might in general be seen as an abundantly acceptable risk, far off in the tail, for Mr or Ms Harassed Finance Minister. A government would have to blow up the economy and try to restructure its debt first. A tail risk all to itself.</div>
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Maybe the sovereigns therefore think they’re safe enough. When it comes to bearing holdout risk, it is worth noting that one or two of the sovereigns here who have issued with ‘payments’ pari passu language did so under English law and the exclusive jurisdiction of English courts.</div>
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There’s some speculation that an English judge would laugh a payment interpretation of pari passu right out of court. Informed speculation, based on <a href="http://ftalphaville.ft.com/files/2012/11/fmlc79mar_2005.pdf" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Analysis of the role, use and meaning of pari passu clauses in sovereign debt obligations as a matter of English law - FMLC">these 2005 ruminations</a> by the Financial Markets Law Committee. (The FMLC quite literally said English contract interpretation is far too common sense to tolerate silliness like this.) But then it remains only speculation: there has been no decisive English court ruling that turned on the meaning of pari passu. English courts sometimes <a href="http://ftalphaville.ft.com/2012/07/31/1102671/more-on-those-endangered-exit-consents/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="More on those endangered exit consents - FT Alphaville">throw up</a> left-field judgements in debt restructuring. Meanwhile, what’s now being said about English courts <em>used to be said</em> about New York courts after a Belgian judge rewarded holdouts in <em>Elliott v Peru</em> at the turn of the century. Couldn’t happen here, until it happened.</div>
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Maybe the sovereigns trust in collective action clauses to preempt any holdout challenge, and thus pari passu dispute. There’s a number of the clauses dotted across these bonds’ terms. But then CACs aren’t <a href="http://www.creditslips.org/creditslips/2012/05/sovereign-restructuring-after-nml-v-argentina-cacs-dont-make-pari-passu-go-away.html" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Sovereign Restructuring after NML v. Argentina: CACs Don't Make Pari Passu Go Away - Credit Slips">holdout-proof</a>.</div>
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Maybe<em> the markets</em> don’t want change. Investors took down Costa Rica’s bond <a href="http://www.ticotimes.net/Business/Eurobond-sales-to-help-Costa-Rica-pay-down-debt_Friday-November-23-2012" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Eurobond sales to help Costa Rica pay down debt - Tico Times">in return for</a> the country’s lowest ever borrowing cost. It is one of the bonds here which feature the ‘payment’ version of pari passu. Elliott and other holdouts would probably love to point to this kind of thing, as it would appear to show there’s no wider systemic problem with the way they want to get their money from Argentina.</div>
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But then we’re assuming sovereigns and markets are the main agents driving any change in pari passu wording. We’re not looking at the drafters themselves: law firms. They are the ones who have previously treated the clause as boilerplate, including it cookie-cutter-fashion across bond contracts despite – apparently – not really knowing where it comes from, how it got into sovereign debt, or what it means.</div>
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There is a curious (and slightly scary) hint here about how big law drafts financial contracts, which is pretty interesting beyond the pari passu saga. In fact, Mitu Gulati went and wrote <a href="http://www.press.uchicago.edu/ucp/books/book/chicago/T/bo14365624.html" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="The Three and a Half Minute Transaction - U of Chicago Press">an entire book</a> on it with Robert Scott of Columbia law school. More on that, in a later post.</div>
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<strong>Related link:</strong><br /><a href="http://www.creditslips.org/creditslips/2012/11/argentinas-not-so-unusual-pari-passu-clause.html" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" target="_blank" title="Argentina's (not so) unusual pari passu clause - Credit Slips">Argentina’s (not so) unusual pari passu clause</a> – Credit Slips</div>
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<strong style="text-transform: uppercase;"><a href="http://ftalphaville.ft.com/tag/pari-passu-saga/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">PARI PASSU SAGA SERIES</a></strong></div>
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The "trial of the century" in sovereign debt restructuring, in our humble opinion. The story of Argentina, its holdout creditors, the grande finale (or is it?) of their battle in US courts.</div>
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<li style="margin: 0px; padding: 0px;"><a href="http://ftalphaville.ft.com/2012/10/26/1232561/a-pari-passu-upset/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">A pari passu upset?</a></li>
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</ol>
</div>
</div>
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This entry was posted by <a href="http://ftalphaville.ft.com/meet-the-team/joseph-cotterill/" rel="author" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;" title="Posts by Joseph Cotterill">Joseph Cotterill</a> on <time class="entry-date" pubdate="" style="display: inline;">Thursday December 6th, 2012 17:40</time>. Tagged with <a href="http://ftalphaville.ft.com/tag/argentina/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Argentina</a>, <a href="http://ftalphaville.ft.com/tag/debt-restructuring/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Debt Restructuring</a>, <a href="http://ftalphaville.ft.com/tag/pari-passu/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Pari Passu</a>, <a href="http://ftalphaville.ft.com/tag/pari-passu-saga/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Pari Passu Saga</a>, <a href="http://ftalphaville.ft.com/tag/sovereign-debt/" rel="tag" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Sovereign Debt</a>.</div>
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<span style="color: blue; font-family: Arial, Helvetica, sans-serif;"><span style="line-height: 24px;"><b><a href="http://ftalphaville.ft.com/2012/12/06/1298193/all-of-this-has-happened-before-and-will-happen-again-sovereign-pari-passu-edition/?" style="color: #888888; text-decoration: none;">http://ftalphaville.ft.com/2012/12/06/1298193/all-of-this-has-happened-before-and-will-happen-again-sovereign-pari-passu-edition/?</a></b></span></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-79619053512845011982012-12-10T08:18:00.000-08:002012-12-10T08:18:33.835-08:00Pari Passu and Bouillabaisse<br />
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<a href="http://www.tfmarketadvisors.com/2012/02/19/pari-passu-and-bouillabaisse/" rel="bookmark" rev="post-1214" style="background-color: transparent; border: 0px; color: #51555c; margin: 0px; outline: 0px; padding: 0px; text-decoration: initial; vertical-align: baseline;" title="Permanent link to Pari Passu and Bouillabaisse">Pari Passu and Bouillabaisse</a></h1>
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I have always thought that “<em style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">pari passu</em>” and bouillabaisse a couple of the coolest things to say, but with the latest plan by the ECB to exchange their Greek bonds for new bonds only they would hold it is worth taking a closer look at “<em style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">pari passu</em>”.</div>
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This is not meant to be in any way legal advice, but as a credit market practitioner these are my thoughts about some potential problems with what the ECB and Greece are doing, and are worth digging into deeper with your lawyers, especially if you are motivated to slow the process down.</div>
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There have been some stories stating that the deal is already done. That may be true, but so far Bloomberg has not updated notional amounts outstanding on existing bonds, so the deal may be done and they haven’t told the right people yet to get the data updated, or the deal is “done” as in agreed in principal but not actually done in a real world way.</div>
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<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Pari Passu</strong></div>
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The bulk of Hellenic Republic debt is issued under Greek Law. The documentation is flimsy and one-sided. Here is a little section from the offering circular for the March 20<sup style="background-color: transparent; background-position: initial initial; background-repeat: initial initial; border: 0px; font-size: 12px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">th</sup>, 2012 bonds.</div>
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<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Status:</strong></div>
</td><td style="border: 0px;" valign="top">Direct, unconditional, unsubordinated and unsecured obligations of the Republic.</td></tr>
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<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Negative Pledge:</strong></div>
</td><td style="border: 0px;" valign="top">None.</td></tr>
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<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Cross Default:</strong></div>
</td><td style="border: 0px;" valign="top">None.</td></tr>
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<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Purchase:</strong></div>
</td><td style="border: 0px;" valign="top">The Republic may at any time purchase or otherwise acquire Bonds in the open market or otherwise.</td></tr>
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Not a whole lot to rely on as a bond holder. The bonds documented under English Law are a lot more interesting. I am working from the offering circular for the 5.2% bonds due 2034 (funny how in 2004 no one thought 5.2% coupon for a 30 year bond was a bad deal or unsustainable).</div>
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<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">2. STATUS OF THE BONDS AND NEGATIVE PLEDGE</strong></div>
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The Bonds constitute direct, general, unconditional, unsubordinated and, subject to this Condition, unsecured obligations of the Republic. The Bonds rank <em style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">pari passu </em>with all other unsecured and unsubordinated obligations of the Republic outstanding on 30 April 2004 or issued thereafter without any preference granted by the Republic to one above the other by reason of priority of date of issue, currency of payment, or otherwise. The due and punctual payment of the Bonds and the performance of the obligations of the Republic with respect thereto is backed by the full faith and credit of the Republic.</div>
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So long as any Bond remains outstanding, the Republic shall not create or permit to subsist any mortgage, pledge, lien or charge upon any of its present or future revenues, properties or assets to secure any External Indebtedness, unless the Bonds shall also be secured by such mortgage, pledge, lien or charge equally and rateably with such External Indebtedness or by such other security as may be approved by an Extraordinary Resolution of the Bondholders (as described in Condition 10).</div>
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Until now, the pari passu language has largely been ignored. While pari passu may be fun to say, I’m not sure it is particularly well defined in the legal sense and I am seeing some evidence that it has been interpreted dramatically differently by various courts. The direct translation is “on equal footing” and Black’s defines it as “proportionally; at an equal pace; without preference”.</div>
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Do the actions of the Hellenic Republic and the ECB breach the pari passu condition? The “terms” of the bonds the ECB is getting will be “identical” to the old bonds except they will be explicitly exempted from certain rule changes that may be made (collective action for example). The intent is clearly to create a “superior” class of debt. While the ECB isn’t getting collateral or breaking the negative pledge argument, these bonds no longer seem to me to be “pari passu with all other unsecured …” The “without preference” clause of the Black’s definition seems the area to target, but again, how courts have determined it, will play a big role.</div>
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It is obvious that the new bonds held by the ECB are (or soon will be) superior to the old bonds, but is it in a way that breaches the “pari passu” covenant? There are a few factors that make it easier to pursue the case.</div>
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Since the clause would be breached if any bond was “elevated” it doesn’t matter whether the ECB holds any English law bonds. If the ECB held Greek law bonds and these English law bonds were deemed to no longer be pari passu with those new bonds, that breach would be sufficient to trigger this covenant. So the fact that it doesn’t rely on the ECB holding any English bonds is a benefit since it makes it difficult for the ECB to work its way around this issue since they can’t just treat their English law bond holdings separately.</div>
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The other key reason this may be worth pursuing is that generally English law favors creditors. Not only does English law generally give strong protection to creditors, but since England has not been a part of the “solution” in the way France and Germany have, their courts don’t have a bias to support their politicians over the law. So you would get to litigate the case in a court system that tends to favor creditors and does not have a strong reason to support the decision at the expense of the law (unlike a Greek, or even French or German court).</div>
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So what does it all mean? Now we move to the “Event of Default” section.</div>
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<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">7. EVENTS OF DEFAULT</strong></div>
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If any of the following events (each an “<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Event of Default</strong>”) occurs:</div>
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(a) the Republic defaults in any payment of interest in respect of any of the Bonds or Coupons and such default is not cured by payment thereof within 30 days from the due date for such payment; or</div>
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(b) the Republic is in default in the performance of any other covenant, condition or provision set out in the Bonds and continues to be in default for 30 days after written notice thereof shall have been given to the Republic by the holder of any Bond; or</div>
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(c) in respect of any other External Indebtedness in an amount equal to or exceeding U.S.$25,000,000 (or its equivalent), (i) such indebtedness is accelerated so that it becomes due and payable prior to the stated maturity thereof as a result of a default thereunder and such acceleration has not been rescinded or annulled or (ii) any payment obligation under such indebtedness is not paid as and when due and the applicable grace period, if any, has lapsed and such non-payment has not been cured; or</div>
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(d) a general moratorium is declared by the Republic or the Bank of Greece in respect of its External Indebtedness or the Republic or the Bank of Greece announces its inability to pay its External Indebtedness as it matures; or</div>
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(e) any government order, decree or enactment shall be made whereby the Republic is prevented from observing and performing in full its obligations contained in the Bonds</div>
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So part (b) would be the relevant section. The pari passu covenant/condition would have been breached. There is a cure period, but since they would have to reverse the decision not just on the English law bonds, but also the Greek law bonds, there is no easy workaround. There are various procedures that bondholders have to follow, but the end would be acceleration of the payments. That acceleration would likely derail the bailout plans, or just cost the taxpayers of the EU a lot more money. Greek law bonds don’t have this right, so it is only the smaller (but still large) amount of English law bonds outstanding that can play this game. You do run into the issue of having to collect from Greece in the end, which has been a problem all along with fighting Greece – even if you win a judgment, it is hard to enforce. Any asset with cross default language would be triggered and CDS would almost certainly get triggered, unless the Troika paid off all the English law bonds in full.</div>
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While we are in the “Events of Default” section, (d) and (e) are worth a quick glance. I think they have been careful to avoid doing anything that would trigger this language (or they have just been lucky), but as the crisis and negotiations intensify, either of these seem to have a real possibility of being triggered.</div>
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Even the Greek law bonds have some similar protection (must have been included by accident) in their Event of Default section</div>
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<tr><td style="border: 0px;" valign="top"><strong style="background-color: transparent; background-position: initial initial; background-repeat: initial initial; border: 0px; font-size: 12px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"> </strong></td><td style="border: 0px;" valign="top">(d) any government order, decree or enactment shall be made whereby the Republic is prevented from observing and performing in full its obligations contained in the Bonds,</td></tr>
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It is probably hard to trigger under those sorts of statements, but it will be interesting to watch the language that comes out in the “retroactive collective action” clauses.</div>
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<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Tender</strong></div>
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There may also be some opportunities to fight the action based on the “tender” clause. This will be specific to English law bonds and can be avoided just by not including English law bonds in the ECB’s deal (whether they have English law bonds or whether the deal is already “done” is still anybody’s guess).</div>
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<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">(2) Purchases</strong></div>
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The Republic may at any time purchase or otherwise acquire Bonds in the open market or otherwise. Bonds purchased or otherwise acquired by the Republic may be held or resold or, at the discretion of the Republic, surrendered to the Agent for cancellation (together with (in the case of definitive Bonds) any unmatured Coupons attached thereto or purchased therewith). If purchases are made by tender, tenders must be made available to all holders of Bonds alike.</div>
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So Greece can buy bonds in the open market. They can then cancel bonds purchased that way or otherwise. Okay, but can Greece do a deal to buy (or exchange) only the bonds held by the ECB and cancel them? There is no way that is an open market purchase. This clause specifically states that if purchases are made by tender, the tenders must be made available to ALL holders. Is the exchange with the ECB actually a tender offer? I think at best this is unclear. There is no way it can be viewed as an open market purchase (even though the ECB originally acquired them that way), and there is the “otherwise acquired by” language that seems like a loophole. But what is the tender language meant to pick up? Are there times when a tender offer is mandatory? Can they really just say this is something else? Possibly, but what is the intention of this? Aren’t tender offer rules designed specifically to ensure that certain holders don’t get preferential treatment? If the position is big enough, why wouldn’t a court deem it necessary to do this as a tender offer rather than some made up term the ECB and Greece are going to try and use?</div>
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This can only be pursued if it turns out the ECB holds some English law bonds, and even then, only to the specific bonds they have. That might be relatively easy for the ECB to work around, depending on their holdings, and is only an issue if the “exchange” they are doing would be deemed a tender. Clearly more knowledge about when something has to be done by tender under English law is required. If they breached the law and did this deal already, and it should have been done by a tender, can you also try and collect from the ECB as a party to the transaction? That becomes interesting. If you can get a claim on the ECB through this, then you finally get a shot at the deep pockets.</div>
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<strong style="background-color: transparent; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">None of these ideas are obvious winners in litigation, but they don’t seem too stupid to explore in more depth. Especially with March 20<sup style="background-color: transparent; background-position: initial initial; background-repeat: initial initial; border: 0px; font-size: 12px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">th</sup> rapidly approaching, anything that can be used to convince them to pay you out at par rather than accepting PSI may be well worth the effort. With the latest PSI rumors showing an even worse package, the downside from fighting, delaying, and possibly winning is higher, is marginal. Will a settlement after a payment default really be that much worse than the PSI default settlement?</strong></div>
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The Troika and Greece are trying to change the rules of the game on the fly. Who knows what the long term consequences will be (probably bad), but they are also likely to create a lot of unintended short term consequences.</div>
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<span style="color: blue; font-family: helvetica, arial, sans-serif;"><span style="font-size: 12px; line-height: 18px;"><b><a href="http://www.tfmarketadvisors.com/2012/02/19/pari-passu-and-bouillabaisse/">http://www.tfmarketadvisors.com/2012/02/19/pari-passu-and-bouillabaisse/</a></b></span></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-51118920681773795582012-12-09T16:22:00.001-08:002012-12-09T16:22:22.478-08:00"The Shape Of The Next Crisis" - A Preview By Elliott's Paul Singer<br />
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"The Shape Of The Next Crisis" - A Preview By Elliott's Paul Singer</h1>
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<em>Transcribed from a speech given by Paul Singer of Elliott Management</em></div>
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<strong>Investing is an art, more so than a science. </strong>And for me, what I get paid for is managing the “dark art,” if you will, of risk management and trying to be a visionary and having a dark vision at all times about what can go wrong.</div>
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It’s a particularly fruitful and impactful time to be thinking about risk management and the thing I want talk about today is what I’ve described as “The Shape of the Next Crisis.” That doesn’t mean we’re going to be talking about the timing of it or exactly what to short or how to make money from it. But it’s to provoke thought about what the elements are, the current landscape, the various aspects that will shape the timing, as well as the amplitude, the predictability, the suddenness of the next crisis.</div>
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It’s not something that I can talk about in any kind of hierarchical fashion. There are a number of elements that are in play, some of which are novel, completely new in virtually the human landscape.</div>
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<strong>But they combine in what I think of, when I’m thinking of risk management and how to hedge my portfolio, what I think of as kind of “an evil stew.”</strong></div>
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But here they are, and it should be obvious when you really think about it, but you have to bring these elements from other facets of life to see how they impact trading and investing.</div>
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<span style="text-decoration: underline;"><strong>On Modern Communications and Information Processing</strong></span></div>
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It is increasingly the case (and I’ll give you a couple of recent examples) that people coalesce, form, and reform ideas in a much more powerfully focused, and abrupt, and stark way than they ever have in the past.</div>
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<strong>One of the most interesting examples of this is the so-called “Arab Spring” where the forces underlying these societies – totalitarianism, security services, violence, oppression, etc. – have existed in the countries that have been affected for decades.</strong> All of the sudden it started in January with a singular small event in Tunisia. And now it’s a few months later and there are 11 countries in various stages of more or less similar wide-spread revolts.</div>
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<strong>And how did this happen?</strong> You speak to experts in the Middle East, you speak to experts in that area or in those particular countries, and you don’t get a satisfactory answer. You get “totalitarianism.” <strong>The answer, I believe, relates to social media and the way people are connected - it’s the Internet, it’s Facebook, it’s Twitter – and the way people process information enabling people to develop the same thoughts simultaneously</strong> and to act and coalesce physically as well as emotionally.</div>
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The vector changes with something like this are virtually instantaneous. <strong>In 6 months, for 11 countries that have been more or less family run or totalitarian, to be in revolt is a very, very powerful illustration of this point.</strong>The Flash Crash about a year ago in stocks, where all of the sudden, the technology of the marketplace and the way the exchanges had their rules about processing orders in relationship with other exchanges, coalesced one afternoon, to have hundreds of stocks virtually evaporate all at once - within seconds or minutes or five minutes or half an hour.</div>
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This is a very powerful element and <strong>will serve as an accelerant in the next crisis</strong> so hold that one up on the blackboard, metaphorically speaking, while I talk about the next elements.</div>
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<span style="text-decoration: underline;"><strong>On The Financial System And Leverage</strong></span></div>
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Let’s talk about financial institutions and the financial system. The major message that I want to give you (and I’ve invited challenge on both parts of my thesis here and I’ve never had anybody challenge it): <strong>The major financial institutions in the US and around the globe are utterly opaque; and The next financial crisis will happen faster, more suddenly.</strong></div>
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We cannot (I have 110 investment professionals), and I surmise that <strong>you cannot, understand the financial condition of any bank, major financial institution</strong>. You can’t see the actual size of the balance sheet. You have no idea what that derivatives section means…it’s 10 to 100 times the size of the actual balance sheet.</div>
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<strong>So when people say, “Well, it used to be 40x leveraged,” (some of them were 90x leveraged) “but now they’re 15 to 20 times leveraged.”</strong> Well that’s just great. Except you go to the derivatives and see numbers in the trillions and trillions and trillions and there is no clue, you have no clue, no understanding, of what that is actually composed of. Is that composed of trades that are basically unwound where all you have is counterparty risk? Is that composed of actual hedges of upper tranches the way we would have in an admitted hedge fund?</div>
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<strong>So you are looking at balance sheets without any real understanding of how the balance sheets and the companies would perform in the event of a crisis.</strong> Which of these trades or trillions of dollars of trades, which in normal times oscillate like this [very small motion] and that’s why they’re so big, would in really bad times start going like this [large motion]. And if you actually have capital of only half a percent, or one percent or five percent of your actual footings, not just unwound trades that happen to still be on balance sheet, but actual footings, you’re in trouble.</div>
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<strong>The kind of thing that wound up the financial system three years ago is expected to be different </strong>in form than the kind of things that would unwind the financial system the next time. But I’m going to argue that the <strong>next time will be faster</strong>. If you think back to ’07 and ’08, it was episodic. It wasn’t just suddenly that in the second or third week in Sept that Lehman goes under and that’s the crisis and the whole world collapsed. No, there were several episodes leading up to that.</div>
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After that, what kept the entire financial system from coming to a grinding halt was quite simple. It wasn’t that all of the other firms were in much better shape than Lehman. <strong>It’s very simple, it’s that governments, here and in Europe, underwrote the entire system.</strong> Ben Bernanke, of whom I’m not a fan... at all, has been quoted as saying that in the absence of the government guarantee and underwriting, 12 of the 13 biggest banks in the world would have gone out of business following Lehman. Whether it’s 12/13, or 13/13, or 6 or 8 of 13, is completely imponderable, but the point is actually well-taken. <strong>In the absence of that guarantee there would have been a cascading collapse because of the opacity.</strong></div>
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There are people in this room that are on trading desks or manage trading operations at investment banks. You know for a fact that you knew nothing about the financial condition of your five biggest counterparties. <strong>And so your relationships, and your willingness to trade, with those counterparties was dependent on rumor or credit spreads widening or not widening</strong>. And that’s a very terrible place for the financial system to be in.</div>
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So take the opacity, take the fact that you can’t really understand the financial condition, and take the fact that the leverage hasn’t really been rung out. <strong>And what you realize is that the lessons of ’08 will actually result in a much quicker process, a process that I would describe as a “black hole” if and when there is the next financial crisis.</strong></div>
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The next financial crisis obviously can only happen if, believably, the governments either cut loose the major financial institutions - believably and credibly unwound the guarantee - or even more difficult and scary, if the government guarantee were not enough. And that’s one of the next elements in the shape of the next crisis. <strong>As you know, risk has migrated upward, it’s migrated from lenders and borrowers really to governments.</strong> It’s gone on the balance sheet of the US, the ECB (the various countries of Europe, particularly Germany, France, etc.). That the credit of Europe, the credit of America, is being called into question in the starkest way is part of what will shape the next crisis.</div>
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But before I get to that part, and explain how I think that impacts, I want to come back to the trader and trading part of this. <strong>The lesson of ’08, which is indelibly stamped upon every hedge fund forehead and trading desk head, is: Move your assets first, stop trading first, sell the paper first, and ask questions later.</strong> Those that moved from Lehman days or weeks before the end were happy. Those that sat there thinking that they were protected in prime brokerage accounts or protected in some other ways, or that firms like Lehman wouldn’t be allowed to go under were stuck in the company (of course Lehman is still in bankruptcy) with claims trading at 20-something cents on the dollar, depending on where you are in the capital structure.</div>
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<span style="text-decoration: underline;"><strong>On 'Orderly Liquidation' And How Dodd-Frank Has Made The System More Brittle</strong></span></div>
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<strong> </strong>So, I want to put one more element in place in the trading and financial institution part of the equation.</div>
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And that’s the law that was signed into law a few months ago, Dodd-Frank. I don’t know what it’s actually called, but it is the financial institution reform law and it is designed purportedly to make the system safer. <strong>“Safe” actually, not just “safer.”</strong></div>
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In my opinion, <strong>what Dodd-Frank has actually done is to make the system more brittle and complete the picture, in my mind, of a black hole, meaning a very vicious, sharp and abrupt process if you put together all of the things that I’ve said so far.</strong></div>
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So what is it about Dodd-Frank that contributes to this black hole, or contributes to this brittle, unsafe condition? <strong>It’s the “Orderly Liquidation Authority,” a very humorously named part of this law because what I think it actually represents is a very disorderly process.</strong> Under this authority, which was purportedly designed to provided a “not-Lehman” outcome (you know, no government bailout and a calm resolution of large financial institutions), under this process the FDIC has the authority, contrary to all US bankruptcy practice and law, to seize financial companies which are quote “in danger of default.”</div>
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Under previous bankruptcy law, companies had to default, actually default, or managements voluntarily put them in bankruptcy in order for them to be in bankruptcy.</div>
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“Danger of default,” if you think about that, plus with the other parts of this that I’ll describe, means that if a company is in trouble, and it’s large and opaque, then it’s in danger of default and can be seized any day. And if <strong>I say any moment it’s only a slight exaggeration, because by statute the process of throwing a company into the Orderly Liquidation Authority is about 48 hrs long, and is effectively unreviewable</strong> (even though there is an injunction attached to this process with the Treasury secretary and a couple of other people looking at it).</div>
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<strong>So companies can be seized that are in danger of default, and what is the FDIC ordered to do and what can it do?</strong> It is ordered to throw out management…quite bizarre. It is enabled to discriminate among classes of creditors similarly situated... strange. It’s enabled to move assets around and transfer assets to bridge companies. And it’s enabled to go against people in or out of the company who are quote “responsible for the financial condition.”</div>
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Let me define Systemically Important Financial Institutions first and then continue on. Under this legislation, the government is supposed to designate certain companies as “systemically important.”</div>
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I’ve been quoted as saying that I feel that’s nutty. <strong>It’s nutty because no financial institution should be too big to fail.</strong> All financial institutions should be governed by the same rules regarding leverage and risk. And <strong>companies can become systemically important, or un-become systemically important, extremely quickly in today’s world</strong> as a result of taking on leverage, changing their positions.</div>
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Let’s put that all together. If you are trading with a big company and that company or other companies have been identified as systemically important institutions, if you are observing a large company getting into trouble, what you know is that <strong>you have to pull your assets because those assets can be transferred</strong> (regardless of the financial condition of the subsidiary that your assets are a part of, whether it’s a prime brokerage subsidiary or otherwise). You don’t know how your claim will be treated, so you have to sell the bonds that you own; if the guy down the block, Bob’s Big Bank [is a similarly situated creditor and] has been designated as systemically important, that guy may be getting a priority recovery.</div>
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<strong>So the whole thing militates toward stepping away abruptly from any company that is designated as systemically important.</strong> So I think that the opacity, the lessons of ’08, the vicissitudes and thoughtlessness of Dodd-Frank, militate in favor of a very, very abrupt resolution.</div>
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<span style="text-decoration: underline;"><strong>On Japan And The Confidence-Destroying Implications Of Monetary Policy</strong></span></div>
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There isn’t time to flesh out in detail the other accelerants of what the next financial crisis might look like, but let me just say a word or two on monetary policy. <strong>Monetary policy, which is now doing virtually all of the job creation work in the United States (in particular) and of course in Japan also, has created a very distorted recovery and some people think, including myself, that it’s been at least partially responsible for inflation in commodities and gold.</strong></div>
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Quantitative easing which is this duration shortening mechanism, zero interest rates which is extraordinarily unusual and is now in the United States as well as Japan, as well as the long term entitlement insolvency in the United States, <strong>are platforms for a possible loss of confidence</strong>.</div>
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<span style="text-decoration: underline;"><strong>And In Conclusion</strong></span></div>
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I think people who are managing money or investors who are trying to figure out what the next crisis may look like, should be processing these elements and thinking about how they can interact, together with the modalities of modern communications and the way people process information, to create something very sudden.</div>
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<strong>Nobody in America has actually seen, or most people probably can’t even contemplate, what an actual loss of confidence may look like. </strong>What I’m trying to struggle with as a money manager, who really seriously doesn’t like to lose money, is how to protect our capital and how to think about the next crisis.</div>
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If you think about some of these elements and how they might interact, you might come up with other paths of transmission or risk and pain.<strong> But I wouldn’t go about your business thinking it’s business as usual in a typical post-crisis, post bear market recovery.</strong></div>
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<span style="text-decoration: underline;"><strong>Questions And Answers Section...</strong></span></div>
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<strong>Q: [Thoughts on Europe]?</strong></div>
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<strong>A:</strong> Yeah, that’s really important. My view about Europe starts with my view 15 yrs ago (and by the way, on Wall St if you’re early, you’re wrong). <strong>My view 15 yrs ago was that the Euro was an inappropriate backdoor experiment on quasi-sovereignty.</strong> And all it would take would be a stark variation in economic performance or geopolitical or military considerations or interests. And here we are and there’s been a stark divergence and the Euro is in the process of centrifugal force and breaking up.</div>
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<strong>Will it break up? It’s entirely unclear</strong>, and I’m not going to predict that it’s going to break up or whether Greece is going to actually leave it. What I will say is that it doesn’t make sense for the underperforming countries to actually be part of this. Everyone looked like they were getting benefits during the period of time when there was convergence. Exports for Germany, lower interest rates for Greece and Portugal and Spain and the rest.</div>
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<strong>Big risks were built up, big variations in performance, and now Germany in particular is writing out checks. </strong>As long as Germany keeps writing out checks, the euro can limp along, Greece can limp along.</div>
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But the answer to your question is the fixes to this, even if to kick the can down the road, are deflationary, they’re harmful to growth despite the fact that a breakup of the euro would fall upon Greece. <strong>Pulling out by Greece from the euro would trigger other consequences in several of these other countries, would create a banking crisis which would have to be dealt with.</strong></div>
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So there is near term pain in doing, in my view, the right thing. But the medium- to longer-term pain of writing out checks to insolvent countries like Greece (insolvent, it’s not a liquidity crisis, insolvency), is ultimately something that’s going to be dampening growth in Europe, dampening global growth, possibly creating the transmission mechanism for the next banking crisis. So I think we’re watching it. <strong>And by the way, how do I think it’s going to actually happen that the situation is resolved? It’s going to be from the bottom up, the political process. It’s going to be on the streets, it’s going to be hundreds of thousands of Greeks, or hundreds of thousands of Germans demonstrating against the bailouts.</strong></div>
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The elites want to keep writing the checks because their paradigms, their desire to have this experiment (because that’s what it is, it’s only 12 or 13 yrs old) continue. That’s what their dream was: one Europe - sovereign. And they were going to get to <strong>sovereignty through the back door</strong>. It isn’t working out at the moment; I don’t think it’s going to work out. And the fact that it’s not working out is quite painful and the way they’re doing it is stretching out the pain.</div>
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<strong>Q: [Insights on using CDS on sovereign debt to hedge your portfolio]?</strong></div>
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<strong>A: </strong>Very good question. The question was about buying credit default swaps on countries or companies in order to hedge your positions, as a general risk management tool. I think that’s a really great question, it’s one that people like us really struggle with.</div>
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<strong>One of the things that 2008 (I had forgotten to say this before, so thanks for reminding me) showed us about risk management was that some of the tools that we thought that we had for risk management were actually tools that could be harmed or defeated by the actions of governments.</strong> And governments have shown an increasing inclination to push us around, us as a community. Meaning overnight bans on short selling, statements and the beginnings of action against credit default swaps, so-called “naked” credit default swaps.</div>
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<strong>Credit default swaps in the abstract, or actually in practice up till recently, are very effective at bringing liquid tools for taking judgments long and short about securities, and countries, companies that otherwise would be completely illiquid. Borrowing sovereign debt to sell short is not easy.</strong></div>
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When countries and companies get into trouble, it’s very easy and very standard to be blaming speculators and credit default swaps as one of the reasons, or the main reason why a spread is blowing out and why the country or company is in trouble (because when a spread blows out, financing opportunities and possibilities diminish, etc.). Who can say what portion of CDS trading is so big that it actually creates prices rather than just discovers prices?</div>
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<strong>But one of the very difficult parts about running a portfolio that is aimed to be absolute return or very risk conscious and trying to avoid the consequences of the next crisis, is that it’s very difficult to predict using tools like that, which of these tools will be left unimpaired, or which will be suddenly impaired or destroyed by government action.</strong></div>
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One of the things that bothers me about running a gold position is (since gold is, really to me, a thermometer about how people think about real money versus fake money or versus paper money possibly for the first time in people’s lives of anybody in this room), <strong>if gold actually is starting to be priced at a price that would represent real fear about paper currencies, what will governments do to derivatives or actual gold to keep themselves from being subject to what they feel is inflation caused by speculators?</strong></div>
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So I think everyone who is using these complicated instruments needs to understand that governments have sent out a shot across the bow that they are not in the mood to allow for free markets,<strong> when the free markets challenge the “everything-is-fine-and-we-can-kick-the-can-down-the-road” way of governing.</strong></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-10280006830114357062012-11-29T16:11:00.001-08:002012-11-29T16:11:52.996-08:00Today the House Foreign Affairs Committee's Subcommittee on the Western Hemisphere passed H.R. 1798, the Judgment Evading Foreign States Accountability Act of 2011 (JEFSA).<br />
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<a href="http://rolfjkoch.blogspot.de/2012/11/today-house-foreign-affairs-committees.html" style="color: #6699cc; text-decoration: initial;">Today the House Foreign Affairs Committee's Subcommittee on the Western Hemisphere passed H.R. 1798, the Judgment Evading Foreign States Accountability Act of 2011 (JEFSA).</a></h3>
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<b><b><span style="font-family: 'Times New Roman', serif; font-size: 14pt;">ATFA Co-Chairs Nancy Soderberg and Robert Shapiro Applaud Subcommittee Approval of Legislation Holding Argentina Accountable</span></b></b></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">WASHINGTON, D.C. (November 29, 2012) <span style="font-size: 14px;">-</span> <i><b><span style="color: red;">Today the House Foreign Affairs Committee's Subcommittee on the Western Hemisphere passed H.R. 1798, the Judgment Evading Foreign States Accountability Act of 2011 (JEFSA). </span></b>The legislation would "prevent foreign states that do business, issue securities, or borrow money in the United States, and then fail to satisfy United States court judgments totaling $100 million or more" from hurting U.S. businesses and investors and flouting the rule of law. </i></span></div>
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<i><span style="font-family: 'Times New Roman', serif; font-size: 12pt;"></span></i><i><span style="font-family: 'Times New Roman', serif; font-size: 12pt;">The following statement should be attributed to Ambassador Nancy Soderberg and Hon. Robert J. Shapiro, co-chairs of American Task Force Argentina:</span></i></div>
<span style="font-family: 'Times New Roman', serif; font-size: 12pt;"></span><br /><span style="font-size: 16px;"><span class="apple-style-span">Today's markup of JEFSA shows that Congress understands the importance of </span>holding foreign governments accountable when they act in bad faith regarding </span><span class="apple-style-span"><span style="font-size: 16px;"><span style="font-size: 11.5pt;">U.S. citizens and the international community</span></span><span style="font-size: 16px;">. We commend the Subcommittee on the Western Hemisphere and particularly Chairman Connie Mack for his leadership and support in this matter, along with the other members of the subcommittee. JEFSA would have a profound impact when it comes to situations such the recent actions of the Argentine government, which has disregarded more than 100 U.S. court judgments directing it to honor its obligations to U.S. lenders and investors. It is our hope that the Congressional leadership will give this bill due consideration to show the Argentine and any other irresponsible governments that there are consequences to their actions. </span> </span><br /><span style="font-family: 'Times New Roman', serif; font-size: 12pt;"></span></span></td></tr>
<tr><td><span style="font-size: 12px;"><i><u><b>About the American Task Force Argentina</b></u><br />The American Task Force Argentina (ATFA) is an alliance of organizations united for a just and fair reconciliation of the Argentine government's 2001 debt default and subsequent restructuring. Our members work with lawmakers, the media, and other interested parties to encourage the United States government to vigorously pursue a negotiated settlement with the Argentine government in the interests of American stakeholders. To contact us, email media@atfa.org or call 888-662-2382.</i></span></td></tr>
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<span style="font-size: 11px;"><br /><b><i>American Task Force Argentina</i></b> PO Box 3197 Arlington VA 22203-0197</span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-38686478557229003022012-11-28T19:10:00.000-08:002012-11-28T19:10:10.187-08:00Updated: The procedure of litigating pari passu? posted by Mark Weidemaier<br />
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Updated: The procedure of litigating pari passu?</h3>
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posted by Mark Weidemaier</div>
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Lots of activity in the <em>pari passu </em>litigation: The lawyers for the exchange bondholders have been working overtime, filing an emergency motion to stay Judge Griesa's injunction (just granted <span class="asset asset-generic at-xid-6a00d8341cf9b753ef017ee5b809e5970d"><a href="http://www.creditslips.org/files/the-stay-order.pdf" style="color: #003366;">here</a></span>!) and asking the Second Circuit to let them intervene in the appeal. And there has been some great analysis of <a href="http://ftalphaville.ft.com/2012/11/22/1276313/poker-with-judge-griesa-part-one/" style="color: #003366;" target="_self">the injunction</a> and its <a href="http://ftalphaville.ft.com/2012/11/23/1276923/poker-with-judge-griesa-part-two/" style="color: #003366;" target="_self">implications for exchange bondholders</a> (by Joseph Cotterill at FT Alphaville), discussion of the<a href="http://blogs.reuters.com/felix-salmon/2012/11/26/the-consequences-of-elliott-vs-argentina/" style="color: #003366;" target="_self">consequences for future restructurings</a> (by Felix Salmon), and consideration of Argentina's suggestion that it might be willing to <a href="https://mm.jpmorgan.com/EmailPubServlet?h=-pog3c5q&doc=GPS-999152-0.html" style="color: #003366;" target="_self">re-open the exchange offer</a> for holdouts (by Vladimir Werning).</div>
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In this post, I want to explore the <em>pari passu </em>litigation from a different angle - one that focuses on a question of procedure raised by the Second Circuit's interpretation of the clause. Here's the question: Let's assume that the <em>pari passu</em> clause entitles creditor A to receive a ratable share of any payment made to creditors with whom creditor A ranks equally: creditors B, C, D, etc. Creditor A sues borrower to enforce this right. Who else should participate in the lawsuit? And can the lawsuit really be structured in a way that will be fair to everyone affected by it? (The exchange bondholders raised these questions in their brief, but the district judge didn't address them.)</div>
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I hope civil procedure buffs can weigh in on this, but shouldn't other creditors have a seat at the litigation table? In US federal courts, third parties must be joined as litigants if they have an interest in the subject matter of a lawsuit and if the lawsuit may "<a href="http://www.law.cornell.edu/rules/frcp/rule_19" style="color: #003366;" target="_self">as a practical matter impair</a>" their ability to protect the interest. As always, there are exceptions, but the starting premise is that such third parties must be joined. Recall that the Second Circuit <a href="http://www.creditslips.org/creditslips/2012/11/argentinas-not-so-unusual-pari-passu-clause.html" style="color: #003366;" target="_self">interpreted the clause</a> as a promise not to pay exchange bondholders without paying holdouts. Perhaps Argentina can afford to pay everyone, but its potential willingness to default rather than pay NML etc. arguably amounts to a "practical impairment" of exchange bondholders' interests. Plus, the logic of the Second Circuit's interpretation would require a country to make ratable payments even if it couldn't afford to pay everyone in full. So it's easy to imagine a situation where a suit to enforce the <em>pari passu </em>obligation would effectively take money from a creditor's pocket.<br /><div style="margin-bottom: 10px; margin-top: 10px;">
If it is necessary to join other creditors - in this case, holders of restructured debt - how might that work? A defendant class action, in which one or more exchange bondholders is appointed to represent all the others on the question of the meaning of the <em>pari passu</em>clause? Perhaps, but such a process would be kind of ironic, given the increasing reluctance of courts to certify plaintiff class actions under US law. Indeed, it might prove impossible to join all relevant parties. In such cases, the rules allow (but do not require) courts to proceed with the lawsuit, but this would result in a process that significantly impacts the rights of people who are not effectively represented. Many <em>pari passu</em>aficionados won't need another reason to question the court's interpretation. But if you are keeping score, this seems like another. Given the clause's inherent ambiguity, why choose an interpretation that is so difficult to enforce in a collectively fair manner?</div>
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<em>UPDATED to include a link to the stay order.</em></div>
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November 28, 2012 at 5:01 PM in <a href="http://www.creditslips.org/creditslips/sovereign-debt/" style="color: #003366;">Sovereign Debt</a></div>
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<span style="color: blue; font-family: verdana, trebuchet ms, sans-serif;"><span style="font-size: 12px;"><b><a href="http://www.creditslips.org/creditslips/2012/11/the-procedure-of-litigating-pari-passu.html">http://www.creditslips.org/creditslips/2012/11/the-procedure-of-litigating-pari-passu.html</a></b></span></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-72119582684296430862012-11-28T15:00:00.001-08:002012-11-28T15:00:39.739-08:00 It is hereby ORDERED that the November 21, 2012 orders of the district court entered in relation to this matter are all stayed pending further order of this Court. <br />
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<span style="background-color: transparent; color: #222222; letter-spacing: inherit; margin: inherit; padding: inherit;">MITTWOCH, 28. NOVEMBER 2012</span></h2>
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<a href="http://rolfsgriechenlandblog.blogspot.de/2012/11/it-is-hereby-ordered-that-november-21.html" style="color: #888888; text-decoration: initial;">It is hereby ORDERED that the November 21, 2012 orders of the district court entered in relation to this matter are all stayed pending further order of this Court.</a></h3>
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<br />UNITED STATES COURT OF APPEALS<br />FOR THE<br />SECOND CIRCUIT<br />_________________<br />At a Stated Term of the United States Court of Appeals for the Second Circuit, held at the<br />Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York, on<br />the 28th day of November, two thousand and twelve.<br />Present: Rosemary S. Pooler,<br />Barrington D. Parker,<br />Reena Raggi,<br />Circuit Judges.<br />_____________________________________________<br />NML Capital, Ltd., Aurelius Capital Master, Ltd.,<br />ACP Master, Ltd., Blue Angel Capital I LLC, Aurelius<br />Opportunities Fund II, LLC, Pablo Alberto Varela,<br />Lila Ines Burgueno, Mirta Susana Dieguez, Maria<br />Evangelina Carballo, Leandro Daniel Pomilio, Susana<br />Aquerreta, Maria Elena Corral, Teresa Munoz De<br />Corral, Norma Elsa Lavorato, Carmen Irma Lavorato,<br />Cesar Ruben Vazquez, Norma Haydee Gines, Marta<br />Azucena Vazquez, Olifant Fund, Ltd.,<br />Plaintiffs-Appellees,<br />v.<br />The Republic of Argentina,<br />Defendant-Appellant.<br />ORDER<br />Docket Nos. 12-105(L), 12-109(Con),<br /> 12-111(Con),12-157(Con),<br /> 12-158(Con), 12-163(Con),<br /> 12-164(Con), 12-170(Con),<br /> 12-176(Con), 12-185(Con),<br /> 12-189(Con), 12-214(Con),<br /> 12-909(Con), 12-914(Con),<br /> 12-916(Con), 12-919(Con),<br /> 12-920(Con), 12-923(Con),<br /> 12-924(Con), 12-926(Con),<br /> 12-939(Con), 12-943(Con),<br /> 12-951(Con), 12-968(Con),<br /> 12-971(Con).<br />_____________________________________________<br /><b><span style="color: red;"> It is hereby ORDERED that the November 21, 2012 orders of the district court entered in relation</span></b><br /><b><span style="color: red;">to this matter are all stayed pending further order of this Court. </span></b><br /> It is further ORDERED that the appeal from the November 21, 2012 orders of the district court<br />is expediated nostra sponte, with appellant’s papers filed by December 28, 2012; opposition papers filed<br />by January 25, 2013; and reply papers filed by February 1, 2013. Parties granted amicus or intervenor<br />status shall file their briefs by January 4, 2013. Oral argument for appellant and appellees shall be at 2 p.m.<br />on February 27, 2013.<br />For the Court:<br />Catherine O’Hagan Wolfe,<br />Clerk of Court</div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-31627988938799361392012-11-26T22:08:00.001-08:002012-11-26T22:08:14.421-08:00Argentinien-Anleihen droht neuer Zahlungsausfall FAZ Print 27.11.2012 von Carl Moses<br />
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<a href="http://rolfjkoch.blogspot.de/2012/11/argentinien-anleihen-droht-neuer.html" style="color: #6699cc; text-decoration: initial;">Argentinien-Anleihen droht neuer Zahlungsausfall FAZ Print 27.11.2012 von Carl Moses</a></h3>
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Argentinien-Anleihen droht neuer Zahlungsausfall<br /><br />FAZ Print 27.11.2012<br /><br /><br /><b><span style="color: red;">Auch die mit der Abwicklung betraute</span></b><br /><b><span style="color: red;">Bank of New York sowie andere beteiligte</span></b><br /><b><span style="color: red;">Intermediäre sind von dem Verbot</span></b><br /><b><span style="color: red;">betroffen.</span></b><br /><br /><br /><br /><br />Die argentinische Regierung<br />kann und will zahlen - aber<br />nicht alles, was ein amerikanisches<br />Gericht vorschreibt.<br />mos. BUENOS AIRES, 26. November.<br />Knapp elf Jahre nach der Staatspleite<br />von 2001 steht Argentinien möglicherweise<br />abermals vor einem Zahlungsausfall.<br />Die Prämien für Kreditausfallversicherungen<br />(CDS) auf argentinische<br />Staatsanleihen schossen in den letzten<br />Tagen auf ein Rekordniveau, das weltweit<br />nur noch von Griechenland übertroffen<br />wird. Dabei kann und will Argentiniens<br />Regierung vermeintlich zahlen.<br />Mit einer sehr unpopulären Maßnahme<br />hat Argentiniens Staatspräsidentin Cristina<br />Kirchner sogar den Zugriff der Bürger<br />auf knappe Devisen beschränkt, um sicherzustellen,<br />dass die Zentralbank über<br />ausreichend Fremdwährung zur Bedienung<br />der Schulden verfügt.<br />Das Problem: Ein amerikanisches Gericht<br />verlangt von Argentinien die Begleichung<br />von Altschulden, deren Gläubiger<br />nach Ansicht der argentinischen Regierung<br />ihr Recht auf Bezahlung verwirkt<br />haben, weil sie frühere Umschuldungsangebote<br />nicht akzeptiert hatten. Zusätzlich<br />verbietet das Gericht Argentinien<br />und den im Zahlungsprozess involvierten<br />Banken, jedwede Schuldenzahlung<br />zu leisten, solange Argentinien nicht<br />gleichzeitig auch die umstrittenen Altschulden<br />bedient. Argentiniens Regierung<br />steckt in einer Zwickmühle. Folgt<br />sie dem Gerichtsurteil oder ihren Prinzipien?<br />Die Gläubiger müssen zittern.<br />Damit geht die Geschichte der bisher<br />größten Staatspleite in eine neue Etappe.<br />Argentinien hatte nach seinem Staatsbankrott<br />von 2001 in drei Umschuldungsrunden<br />2005 und 2010 insgesamt 93 Prozent<br />der Gläubiger von rund 100 Milliarden<br />Dollar dazu bewegen können, auf<br />mehr als zwei Drittel ihrer Ansprüche zu<br />verzichten. Alle bei diesen Umschuldungsrunden<br />ausgegebenen neuen<br />Staatspapiere hat Argentinien seither<br />pünktlich bedient.<br />Die Wirtschaft des Landes erholte sich<br />rasant. Viele der Gläubiger, die Argentiniens<br />harsche Umschuldungsbedingungen<br />seinerzeit nicht akzeptiert hatten, haben<br />das Land unterdessen vor Gerichten<br />in aller Welt auf die volle Zahlung ihrer<br />Ansprüche verklagt und in vielen Fällen<br />entsprechende Zahlungsurteile erstritAuch<br />ein Jahrzehnt nach der Verschuldungskrise sind die sozialen Nöte in Argentinien sichtbar.<br />ten. Bisher waren diese „Holdouts“ indes<br />kaum in der Lage, irgendwo auf der Welt<br />eine Vollstreckung ihrer Forderungen zu<br />erreichen. Mehr als zwei Dutzend Versuche<br />zur Pfändung von argentinischem<br />Staatseigentum wie dem Präsidentenflugzeug,<br />Botschafterresidenzen oder Zentralbankreserven<br />schlugen fehl.<br />Doch der Hedgefonds NML Capital<br />Ltd. aus dem Imperium des amerikanischen<br />Milliardärs Paul Singer, der notleidene<br />Argentinien-Anleihen zu Ramschpreisen<br />aufgekauft hatte, scheint nun einen<br />Weg gefunden zu haben, um Forderungen<br />von rund 1,33 Milliarden Dollar<br />gegen Argentinien durchzusetzen. Dass<br />es Singer gelang, in einer spektakulären<br />Aktion Anfang Oktober das Segelschulschiff<br />der argentinischen Marine in Ghana<br />festsetzen zu lassen, sorgte zwar für<br />weltweites Aufsehen, ist jedoch eher von<br />symbolischem Wert.<br />Wichtiger ist der Erfolg einer Klage<br />von NML in den Vereinigten Staaten.<br />Praktisch alle Schuldenzahlungen Argentiniens<br />an ausländische Gläubiger werden<br />über den Finanzplatz New York abgewickelt.<br />Vor einem Gericht in New York<br />klagte NML, Argentinien verstoße mit<br />seiner Schuldenpolitik, die umgeschuldete<br />Anleihen pünktlich bedient, Altschulden<br />jedoch ignoriert, gegen die in den<br />Anleihebedingungen zugesicherte<br />Gleichbehandlung der Gläubiger. Der<br />Distriktrichter Thomas Griesa gab NML<br />im Februar 2012 recht. Ein Berufungsgericht<br />bestätigte im Oktober die Ansprüche<br />von NML und einigen Nebenklägern.<br />Zu klären blieb lediglich die konkrete<br />Höhe und Modalität der von Argentinien<br />zu leistenden Zahlungen.<br />Argentiniens Staatschefin Kirchner erklärte<br />umgehend, ihr Land werde „nicht<br />einen einzigen Dollar an Geierfonds zahlen“.<br />In der Nacht zum Thanksgiving-<br />Fest am vergangenen Donnerstag reagierte<br />Richter Griesa mit einer für viele Beobachter<br />überraschend harten Verfügung.<br />Danach muss Argentinien NML den vollen<br />Nominalwert der Anleihen und alle<br />aufgelaufenen Zinsen ohne weiteren Verzug<br />zahlen. Vorbehaltlich einer neuen Revision<br />des Berufungsgerichts soll Argentinien<br />die 1,33 Milliarden Dollar auf einem<br />Treuhandkonto deponieren. Andernfalls<br />dürfe eine am 15. Dezember fällige<br />Zahlung von 3,5 Milliarden Dollar<br />auf Umschuldungspapiere nicht gezahlt<br />werden. <b><span style="color: red;">Auch die mit der Abwicklung betraute</span></b><br /><b><span style="color: red;">Bank of New York sowie andere beteiligte</span></b><br /><b><span style="color: red;">Intermediäre sind von dem Verbot</span></b><br /><b><span style="color: red;">betroffen.</span></b><br /><b></b><br /><b>Richter Griesa begründete sein harsches</b><br /><b>Urteil mit den wiederholten Äußerungen</b><br /><b>von Staatschefin Kirchner und anderen</b><br /><b>Regierungsmitgliedern, wonach</b><br /><b>Argentinien kein Urteil zur Zahlung an</b><br /><b>Umschuldungsverweigerer befolgen werde.</b><br /><b>Griesa hat Argentinien immer wieder</b><br /><b>Aufschub gewährt und Pfändungsklagen</b><br /><b>abgewiesen. Nun scheint der 82-Jährige</b><br /><b>die Geduld zu verlieren.</b><br /><b>„Nach zehn Jahren Rechtsstreit ist das</b><br /><b>ein gerechtes Ergebnis“, begründete</b><br /><b>Griesa sein Urteil. „Argentinien ist das</b><br /><b>schuldig, und es schuldet das jetzt.“ Aufgrund</b><br /><b>der erklärten Verweigerungshaltung</b><br /><b>der Regierung müsse das Gericht sicherstellen,</b><br /><b>dass Argentinien keine neuen</b><br /><b>Wege finde, sich seinen Verpflichtungen</b><br /><b>zu entziehen. Griesas Verfügung sei</b><br /><b>„juristischer Kolonialismus“, <span style="color: red;">empörte</span></b><br /><b><span style="color: red;">sich Argentiniens Wirtschaftsminister</span></b><br /><b><span style="color: red;">Hernán Lorenzino. „Es fehlt nur noch</span></b><br /><b><span style="color: red;">dass sie die 5. Flotte in Gang setzen.“</span> Argentinien</b><br /><b>will nun versuchen, vor dem</b><br /><b>Berufungsgericht eine Revision des Zahlungsbefehls</b><br /><b>zu erwirken. Eines hat das</b><br /><b>Gericht hat in seinem Oktober-Urteil</b><br /><b>freilich erkennen lassen. Es dürfte kaum</b><br /><b>akzeptieren, dass Argentinien den</b><br /><b>Holdouts gar nichts zahlt<span style="color: red;">.</span></b></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-58701334944541029362012-11-26T15:37:00.001-08:002012-11-26T15:37:07.563-08:00Griesa bügelt Ansinnen seine "Urteile" vs Argy zu Gunsten Elliott/NML auszusetzen/aufzuheben kurz angebunden ab !!!!<br />
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<a href="http://rolfsgriechenlandblog.blogspot.de/2012/11/griesa-bugelt-ansinnen-seine-urteile-vs.html" style="color: #888888; text-decoration: initial;">Griesa bügelt Ansinnen seine "Urteile" vs Argy zu Gunsten Elliott/NML auszusetzen/aufzuheben kurz angebunden ab !!!!</a></h3>
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<br />ORDER<br />The motion listed as document number 402 for case 08-CV -6978 - Motion to Appear<br />as Interested Non-Parties - is denied.<br />Dated: <span class="Apple-tab-span" style="white-space: pre;"> </span> New York, New York<br />~. ;J,0 ,2012<br />~p~<br />Thomas P. Griesa<br />U.S. District Judge<br /><br /><br /><br />ORDER<br />The motion listed as document number 401 for case 08-CV-6978 - Motion to Vacate<br />- is denied.<br />Dated: NewY~~NewYork<br />t,JrO ,2012<br />~v~ Thomas P. Griesa<br />U.S. District Judge</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-27004294254791763722012-11-25T23:59:00.004-08:002012-11-25T23:59:44.435-08:00Elliot vs Argentina is a domestic Argentine issue By Felix Salmon <br />
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Elliot vs Argentina is a domestic Argentine issue</h2>
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By Felix Salmon</div>
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NOVEMBER 24, 2012</div>
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<a href="http://blogs.reuters.com/felix-salmon/tag/argentina" style="color: #006e97; cursor: pointer; font-weight: bold; text-decoration: initial; text-transform: uppercase;">ARGENTINA</a> | <a href="http://blogs.reuters.com/felix-salmon/tag/sovereign-debt" style="color: #006e97; cursor: pointer; font-weight: bold; text-decoration: initial; text-transform: uppercase;">SOVEREIGN DEBT</a></div>
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If you want to follow all the ins and outs of Elliott vs Argentina in the mainstream press, you’ll soon find something very interesting. It’s a US case, in a US court, which is very likely to have profound consequences for both US markets in general and for one of America’s most diplomatically important laws, the Foreign Sovereign Immunities Act. But to a first approximation, the US press simply hasn’t noticed.</div>
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Most US outlets have carried a single dry and dutiful report, buried on an inside page, somewhere; the NYT didn’t even manage that, <a href="http://www.nytimes.com/2012/11/23/business/global/us-judge-orders-argentina-to-pay-holdout-bondholders.html" style="color: #006e97; cursor: pointer; text-decoration: initial;">relying</a> instead on a wire report from the AP in Buenos Aires. The WSJ has not been much better, although its <a href="http://online.wsj.com/article/SB10001424127887324352004578134264223330312.html?KEYWORDS=elliott+argentina" style="color: #006e97; cursor: pointer; text-decoration: initial;">report</a> is notable for getting notoriously reclusive fund manager David Martinez* on the record — a sign that if they put their mind to it, US journalists could really add some value here.</div>
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By contrast, the FT has been all over the story, in detail, from the very beginning, out of London and Buenos Aires. Alphaville’s Joseph Cotterill has created the invaluable <a href="http://ftalphaville.ft.com/tag/pari-passu-saga/" style="color: #006e97; cursor: pointer; text-decoration: initial;">Pari Passu Saga Series</a>, the newspaper splashed the news all over its front page this morning, and the <a href="http://www.ft.com/intl/cms/s/0/f7882848-3591-11e2-bd77-00144feabdc0.html" style="color: #006e97; cursor: pointer; text-decoration: initial;">combination</a> of Jude Webber in Buenos Aires and Robin Wigglesworth in London has proved to be incredibly powerful and astute. Even accounting for the Thanksgiving holiday in the US, the disparity is striking. The best US newspaper coverage — which has come, singlehandedly, from Michelle Celarier at the New York Post — doesn’t even come close to competing. (Michelle and I share more than an interest in sovereign debt: we’re both former correspondents for the UK’s <em>Euromoney</em>.)</div>
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But by far the most detailed and voluminous coverage has come from the Argentine press, which has been covering the New York court case in extreme detail. Every time that Judge Griesa releases an opinion, it’s immediately uploaded to a multitude of Argentine news sites, and thousands of Anglophone readers flock to download everything he has said, and argue about what it means. This story is <em>huge</em> in Argentina — and unlike the last time that Argentina defaulted, in 2001, everybody has the internet and is following what’s going on, in extreme detail, online.</div>
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Which makes the AP report that the NYT ran with particularly fascinating. Most of the time news stories are interesting when they tell you something you don’t know; in this case, we have a news story which is interesting because it tells us something which isn’t actually true at all.</div>
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As with so many other things involving Argentina, this case is rooted in the bloody dictatorship that ruled from 1976 to 1983. The military junta more than tripled the country’s foreign debts. By 2001, the burden had become unsustainable and the economy collapsed. Argentina’s $95 billion default still stands as a world record.</div>
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Sovereign debt is supposed to be paid no matter who runs a country, but President Fernández has always considered this defaulted debt to be illegitimate, forced onto the Argentines by dictators acting in concert with international financial speculators. She and her late husband and predecessor, Néstor Kirchner, who took office in 2003, have never made any payments on the defaulted bonds.</div>
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In fact, Argentina’s world record was broken by Greece, but never mind that. Much more interesting is the way in which the AP’s Buenos Aires reporter, <a href="http://www.google.com/hostednews/ap/article/ALeqM5gcjQZ2vER1G5sPaq16A2jJmVXY7g?docId=21ee4d17cb7c46dcb50ec9c3380ec81e" style="color: #006e97; cursor: pointer; text-decoration: initial;">Michael Warren</a>, is reflecting a very common view of things in Argentina — that Elliott’s debt is odious and illegitimate.</div>
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Note that Argentina itself, in Griesa’s courtroom, has never made this argument. Quite the opposite: Argentina has always held, at least in New York court, that Elliott’s debt is entirely legitimate, and indeed is just as legitimate as the debt held by exchange bondholders. It’s up to Argentina, as a sovereign nation, which creditors it pays and which it doesn’t — but Argentina, at least as a matter of law, has never denied that it owes Elliott the full amount it’s being asked to pay.</div>
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What’s more, the debt that Elliott holds was <em>not</em>, in any real sense, “forced onto the Argentines by dictators”, and the case is <em>not</em> “rooted in the bloody dictatorship that ruled from 1976 to 1983″. Yes, the junta ran up a lot of debts — and Argentina restructured those debts in its big Brady deal of 1992. By the time the junta-era debts had been restructured, Argentina’s debt was an entirely manageable 30% of GDP; even two years later, in 1994, it was just 31.4% of GDP. It was only in the late 1990s that the democratically-elected Argentine government of Carlos Menem started running up the country’s debts to unsustainable levels.</div>
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Menem, of course, was a Peronist, just like Cristina Fernández and her late husband — and so it would be hard for her to blame Argentina’s current predicament on him. Somehow, she has managed to persuade the Argentine public — and even AP reporters — that paying off Elliott would be tantamount to ratifying the actions of the military junta which lost power before most Argentines were even born.</div>
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All of which helps explain why absolutely everybody is convinced that given the choice between paying all of its creditors and paying none of them — the choice which Griesa is giving Argentina — Cristina will choose the latter. Even Mitu Gulati tells <a href="http://www.ifre.com/argentina-default-looms/21054435.article" style="color: #006e97; cursor: pointer; text-decoration: initial;">Christopher Spink</a> that “Argentina is likely to default on the exchange bonds” — and Gulati is the frequent co-author of Lee Buchheit, of Cleary Gottlieb, which represents Argentina.</div>
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Essentially, there are two choices here. Argentina can somehow win its appeals; or it will end up defaulting on its exchange bonds. The outcome Griesa is trying to order — where Argentina pays its exchange bondholders <em>and</em> its holdouts, in full — is simply politically impossible in Argentina.</div>
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Of course, another Argentine default wouldn’t be the end of the story. It’s hard to pay bond coupons in dollars, even if the bonds are issued under Argentine law, without going through some US-based intermediaries — and Griesa could always try and intercept those payments if Argentina thumbs its nose at him and simply ignores his order. What’s more, Elliott Associates will, everybody believes, make a large amount of money in the CDS market if Argentina does default, and the Argentine government would love to stop that from happening, somehow. (They can’t prevent the fact that Elliott has <em>already</em> made a large sum in the CDS market, on a mark-to-market basis.)</div>
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And there’s a decent case to be made that Argentina’s debt is undervalued right now even if it does end up defaulting. So long as exchange bondholders are happy getting paid out of Argentina rather than New York, they will probably end up with every penny they’re owed — in dollars. There might well be an uncomfortable interregnum, but ultimately they’re more likely than not to get their money. So if you have a strong stomach, maybe the exchange bonds are a buy right here — precisely because many institutional investors <em>don’t</em> have strong stomachs, and have no desire to be holding onto defaulted sovereign debt.</div>
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In any case, in order to really understand what’s going on with Argentina’s bonds, you need to be at least as well versed in Argentine politics as you are in the intricacies of New York law and <em>pari passu</em> clauses. Judge Griesa might have a surprising amount of power. But Cristina Fernández has more.</div>
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*Martinez, one of the world’s most successful distressed debt investors, is siding against Elliott Associates in this case. Similarly, David Boies is siding with the exchange bondholders against Elliott, despite the fact that his son, also called David Boies, founded Straus & Boies with Michael Straus, who represented Elliott in its last major sovereign battle, against Peru. Boies is representing Gramercy Advisors, who also made their name as a vulture fund. This is a case where everybody is pretending to be highly principled — but ultimately, as ever, it’s all about financial self-interest</div>
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<span style="color: blue; font-family: arial, helvetica, sans;"><span style="font-size: 14px; line-height: 22px;"><b><a href="http://blogs.reuters.com/felix-salmon/2012/11/23/elliot-vs-argentina-is-a-domestic-argentine-issue/">http://blogs.reuters.com/felix-salmon/2012/11/23/elliot-vs-argentina-is-a-domestic-argentine-issue/</a></b></span></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-75648225766014412102012-11-25T23:52:00.001-08:002012-11-25T23:52:03.732-08:00Et Tu, FT? (Pari Passu Edition) posted by Anna Gelpern<br />
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<a href="http://rolfsgriechenlandblog.blogspot.de/2012/11/et-tu-ft-pari-passu-edition-posted-by.html" style="color: #888888; text-decoration: initial;">Et Tu, FT? (Pari Passu Edition) posted by Anna Gelpern</a></h3>
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Et Tu, FT? (Pari Passu Edition)</h3>
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posted by Anna Gelpern</div>
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Laugh, cry, give up: the Financial Times <a href="http://www.ft.com/intl/cms/s/0/5ded9f18-3575-11e2-bf77-00144feabdc0.html#axzz2DHRwW1c8" style="color: #003366; text-decoration: initial;" target="_self">editorial</a> argues for Supreme Court review of<a href="http://www.creditslips.org/creditslips/2012/11/pari-passu-wipeout-in-the-southern-district.html" style="color: #003366; text-decoration: initial;" target="_self">Judge Griesa's decision</a> because not enough countries use <a href="http://www.creditslips.org/creditslips/2012/05/sovereign-restructuring-after-nml-v-argentina-cacs-dont-make-pari-passu-go-away.html" style="color: #003366; text-decoration: initial;" target="_self">collective action clauses (CACs)</a> in their foreign-law debt ... and recommends that all do as the <a href="http://europa.eu/efc/sub_committee/cac/index_en.htm" style="color: #003366; text-decoration: initial;" target="_self">Eurozone and adopt CACs</a> (... <a href="http://www.creditslips.org/creditslips/2010/12/collective-action-clauses-das-opium-des-volkes.html" style="color: #003366; text-decoration: initial;" target="_self">in their domestic-law debt</a>?). </div>
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<span style="font-family: 'Trebuchet MS', Verdana, sans-serif; font-size: xx-small;"><span style="line-height: 19px;"><a href="http://rolfsgriechenlandblog.blogspot.de/" id="more" style="color: #003366;"></a></span></span><div class="entry-more" style="clear: both;">
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<em>Aside: </em>True, Europe had long ago <a href="http://europa.eu/efc/sub_committee/cac/old/index_en.htm" style="color: #003366; text-decoration: initial;" target="_self">promised</a> to lead by example and adopt CACs in its foreign-law debt, but that was largely beside the point because (a) <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=932942" style="color: #003366; text-decoration: initial;" target="_self">Mexico had already led by example</a>, and (b) most European sovereign debt is domestic-law ...<a href="http://www.voxeu.org/article/slipstream-greek-debt-exchange" style="color: #003366; text-decoration: initial;" target="_self">But maybe not for long</a> ... Then again, the pendulum may have swung back to<a href="http://blogs.ft.com/beyond-brics/2012/11/23/new-york-law-not-what-it-used-to-be/#axzz2DIO31OYp" style="color: #003366; text-decoration: initial;" target="_self">domestic law</a>. For now, London looks safe from Griesa-style lurches, but so did New York until a few weeks ago.</div>
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Bottom line: for sovereign debtors and creditors alike, domestic-law debt offers protections from holdout hostage dramas like the one playing out in New York. These protections do not come from CACs, but from the debtor's unilateral capacity to change the terms (for example, to reroute the payments). The downside for the creditors is self-evident: there is no guarantee the debtor will use this capacity for their benefit.</div>
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The FT also notes improbably that the U.S. Congress could "modify contract law to deal more sensibly with the Argentine restructuring." The idea that the federal legislature would override state law for the sake of a <a href="http://www.creditslips.org/creditslips/2012/06/edge-of-reason-paripassupalooza-on-capitol-hill.html" style="color: #003366; text-decoration: initial;" target="_self">politically toxic debtor</a> is pretty far-fetched, even apart from fiscal cliffside timing.</div>
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Despite all that, it is hard to disagree with the basic thrust of the editorial and the existential follow-on: "While countries should service their debts in all but exceptional cases, an orderly mechanism for sovereign restructuring is essential for the exceptions. Just as with bankrupt individuals and corporations, value is only destroyed by holding insolvent debtors in never-ending limbo. ... A sovereign bankruptcy regime is not on the horizon."</div>
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And on the bright side, <a href="http://blogs.reuters.com/felix-salmon/2012/11/23/elliot-vs-argentina-is-a-domestic-argentine-issue/" style="color: #003366; text-decoration: initial;" target="_self">at least the FT cares</a>.</div>
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<span style="color: blue; font-family: 'Trebuchet MS', Verdana, sans-serif; font-size: xx-small;"><span style="line-height: 19px;"><b><a href="http://www.creditslips.org/creditslips/2012/11/et-tu-ft-pari-passu-edition.html" style="color: #888888; text-decoration: initial;">http://www.creditslips.org/creditslips/2012/11/et-tu-ft-pari-passu-edition.html</a></b></span></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-45652090677482461642012-11-22T06:41:00.001-08:002012-11-22T06:41:03.199-08:00Elliott Management Vs Argentina Round 3: The Showdown<br />
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<a href="http://rolfsgriechenlandblog.blogspot.de/2012/11/elliott-management-vs-argentina-round-3.html" style="color: #888888; text-decoration: initial;">Elliott Management Vs Argentina Round 3: The Showdown</a></h3>
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Elliott Management Vs Argentina Round 3: The Showdown</h1>
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<span class="submitted" style="font-size: 0.8em; margin-bottom: 5px; width: auto;">Submitted by <a href="http://www.zerohedge.com/users/tyler-durden" style="color: #666666; text-decoration: initial;">Tyler Durden</a> on 11/22/2012 09:27 -0500</span><br /><br /><span class="taxonomy" style="display: block; font-size: 0.8em; margin-bottom: 15px; margin-top: 15px; padding-left: 1.5em; width: 628.5px;"><ul class="links inline" style="display: inline; font-size: 0.9em; line-height: 1.4; margin: 0px; padding: 0px;">
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<a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/11/Libertad.jpg" style="color: #666666; text-decoration: initial;"><img height="94" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/11/Libertad_0_0.jpg" style="-webkit-box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; border: 0px; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; float: left; height: auto; margin-left: 10px; margin-right: 10px; max-width: 100%; padding: 5px; position: relative;" width="125" /></a>Most recently, in "<a href="http://www.zerohedge.com/news/2012-10-31/elliott-management-vs-argentina-round-2-now-its-personal" style="color: #666666; text-decoration: initial;">Elliott Management Vs Argentina Round 2: Now It's Personal</a>" we laid out the story of how in the ongoing legal fight between Argentina's prominent distressed debt creditor, and exchange offer holdout, Elliott Management (and to a smaller degree Aurelius), and distressed debtor Argentina, the moving pieces continue in flux, even as various US legal institutions have demanded that Argentina proceed with paying the holdouts despite the Latin American country's vocal prior refusals to do so, and most importantly, the lack of a sovereign payment enforcement mechanism. Last night, the fight escalate one more, and perhaps final time, before the Rubicon is crossed and Argentina either pays Elliott, "<em>or else</em>" the country proves all those who furiously bought up Argentina CDS in the past two weeks correct, and the country redefaults on $24 billion of debt. Because as <a href="http://www.reuters.com/article/2012/11/22/usa-bonds-argentina-idUSL1E8MM06D20121122" style="color: #666666; text-decoration: initial;">Reuters reports</a>, late last night, US District Judge Griesa overseeing the Argentina case, ordered the Latin American country to make immediate payment with a deadline for escrow account funding of December 15.</div>
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In an ruling delivered just as the United States headed off for its Thursday Thanksgiving holiday, U.S. District Judge Thomas Griesa rejected Argentina's request to maintain his previous order halting payments to holdout investors who did not participate in two bond exchanges of defaulted sovereign debt.</div>
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The ruling is the latest development in a litigation saga that has lasted more than ten years and now appears to be favoring holdout bond investors such as Elliot Management Corp's NML Capital Ltd and Aurelius Capital Management.</div>
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If Griesa's ruling is upheld and Argentina chooses to defy him, U.S. courts could ultimately inhibit debt payments to creditors who accepted the terms of the restructuring, out of consideration for investors who rejected Argentina's terms at the time.</div>
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This would trigger a technical default on approximately $24 billion worth of debt issued in the 2005 and 2010 exchanges.</div>
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Griesa essentially circumvented the traditional appeals process and said no more delays.</div>
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Griesa wrote that he would ordinarily leave his order in place pending a ruling from the 2nd Circuit. However, he concluded this was not possible given comments from Argentine officials, including President Cristina Kirchner, that Argentina would not pay anything to the holdout bondholders.</div>
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"It is the view of the District Court that these threats of defiance cannot go unheeded, and that action is called for," Griesa wrote, saying the payments should be made as soon as possible.</div>
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The 2nd Circuit already upheld Griesa's Feb. 23, 2012 decision that Argentina violated equal-treatment provisions for all creditors when it chose to pay exchange bondholders and not holdout bondholders.</div>
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Given that Griesa's latest decision still needs the final blessing of the 2nd Circuit, he ordered that rather than Argentina paying the plaintiffs directly, it should deposit the money in an escrow account by Dec. 15.</div>
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<strong>In his ruling, Griesa said the less time Argentina was given "to devise means for evasion, the more assurance there is against such evasion."</strong></div>
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"There is no question about what is 'currently due' to plaintiffs," Griesa wrote. "The amount that is currently due is the amount of the unpaid principal, the due date of which has been accelerated, and accrued interest."</div>
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The ball is now in Argentina's court. As a reminder, Argentina made it quite clear it would not pay "<em>one dollar to the vulture funds</em>." The vulture funds in question, are Elliott Management and Aurelius, who are owed upward of $1.3 billion. "Argentina owes this and owes it now," Griesa said. "It should be emphasized that these are debts currently owed, not debts spaced out over future periods of time." Griesa said NML and Aurelius should be paid concurrently or ahead of exchange bondholders.</div>
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And with the coupon payment due in one month, when Argentina has to pay $3.14 billion in accrued interest, we will know in a matter of weeks whether a district court's harsh language in New York is enough to make a Treasurer in Buenos Aires shiver in fear. Somehow we doubt it. Which also means Naval Commodore of His Own Majesty's Navy Paul Singer Second Rank will soon be upgraded to First Rank once he privateers a few Argentinian subs and perhaps an aircraft carrier... if any were still in service of course.</div>
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Without going into details (read Subordination 101 for the full primer), Griesa basically crushed any hopes the exchanging bondholders had that they had received priority status by being fooled into the exchange offer and accepting a price of 30 cents on the dollar:</div>
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Griesa rejected arguments from exchange bondholders that full payment to NML and Aurelius would infringe on their rights.</div>
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"In accepting the exchange offers of thirty cents on the dollar, the exchange bondholders bargained for certainty and the avoidance of the burden and risk of litigating," he wrote.</div>
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"Moreover, it is hardly an injustice to have legal rulings which, at long last, mean that Argentina must pay the debts which it owes. After ten years of litigation this is a just result," the judge said.</div>
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What is most interesting is that Griesa for the first time threatened not only Argentina but its "accomplices" i.e., funds transferring "third party" banks, with enforcement should they selectively wire funds to one group of bondholders, but not another - the hold outs.</div>
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The 2nd Circuit has also directed Griesa to spell out precisely how his injunctions would apply to third-party banks.</div>
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<strong>Among the banks is BNY Mellon, which transfers funds from Argentina to the country's bondholders. </strong>It argues that the injunction would interfere with its duties to the exchange bondholders and could cause a wider disruption to the largely automated international bank payment systems.</div>
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Griesa said BNY Mellon's arguments "miss the point" and if Argentina followed the appeals court ruling there would be "no problem" about the money ending up in the right accounts.</div>
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<strong>He said that if Argentina attempted to make payments to the exchange bondholders in violation of the court's rulings, third party institutions should be "held responsible" for ensuring they are not taking steps to violate the law.</strong></div>
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Of course, BNY has the choice to just pull out and do no more business with Argentina and its creditors. There is always the option that creditors can come in on location in Buenos Aires and collect their interest in bags with dollars signs printed on them. Or just pull an Iran, and demand payment in gold via unsupervised gold transfer pathways, such as Turkey.... or China. If and when such a circumventing route is discovered, it will be one more chip away in the dollar's reserve status.</div>
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Finally, should Argentina not make the payment in December as loudly cautioned by Griesa, wait and see just why Elliott happens to be on the ISDA <a href="http://dc.isda.org/about-dc-committees/current-dc-members/" style="color: #666666; text-decoration: initial;">determinations committee</a>. We anticipate that ISDA will find an Argentinia event of default will have occurred within seconds of the December coupon non-payment as the country follows Hostess into Chapter 22, only this time it is really personal between Argentina and some of the wealthiest hedge funds in the world.</div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-71757398290789137832012-11-18T17:04:00.001-08:002012-11-18T17:04:50.981-08:00Billions in bearer bonds could be lost due to Hurricane Sandy: sources<br />
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<a href="https://3c.web.de/mail/client/dereferrer?redirectUrl=http%3A%2F%2Fwww.nypost.com%2Fp%2Fnews%2Flocal%2Fmanhattan%2Fsunken_treasure_R1WidDOAwSBvWbYgSIoflJ&selection=page1" style="border: 0px; color: black; font-family: 'arial black', arial, sans-serif; font-size: 40px; letter-spacing: -0.05em; line-height: 1em; list-style: none; margin: 0px; outline: 0px; padding: 0px; vertical-align: top;" target="_blank">Billions in bearer bonds could be lost due to Hurricane Sandy: sources</a></h1>
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<li class="byline" style="border: 0px; color: #444444; font-weight: bold; list-style: none; margin: 0px 0px 3px; outline: 0px; padding: 0px; vertical-align: top;">By MICHAEL GARTLAND</li>
<li class="date updated" style="border: 0px; list-style: none; margin: 0px 0px 3px; outline: 0px; padding: 0px; vertical-align: top;"><span style="border: 0px; list-style: none; margin: 0px; outline: 0px; padding: 0px; vertical-align: top;">Last Updated:</span> 12:10 PM, November 18, 2012</li>
<li class="date posted" style="border: 0px; list-style: none; margin: 0px 0px 3px; outline: 0px; padding: 0px; vertical-align: top;"><span style="border: 0px; list-style: none; margin: 0px; outline: 0px; padding: 0px; vertical-align: top;">Posted: </span>1:23 AM, November 18, 2012</li>
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It’s the biggest mystery on Wall Street.</div>
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Hurricane Sandy floodwaters inundated a 10,000-square-foot underground vault downtown, soaking 1.3 million bond and stock certificates — including bearer bonds that function like cash — and putting them in danger of turning to mush.</div>
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A contractor working for the vault owner, the Depository Trust and Clearing Corp., is feverishly working to restore the paper.</div>
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But the value of the threatened notes under 55 Water St. remains unknown to all but the innermost circle of Wall Street bankers.</div>
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One source said $70 billion in bearer bonds were in jeopardy.</div>
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<img alt="LIQUID ASSETS: Thousands of bearer bonds — which could be worth as much as $70 billion — are now in danger of turning to pulp after Hurricane Sandy flooded the downtown vault that had been storing them." height="300" src="http://www.nypost.com/rw/nypost/2012/11/18/news/web_photos/18.1N007.vault1.C--300x300.jpg" style="border-bottom-style: solid; border-width: 0px 0px 3px; display: block; list-style: none; margin: 0px 0px 1px; max-width: 100%; outline: 0px; padding: 0px; vertical-align: top;" title="LIQUID ASSETS: Thousands of bearer bonds — which could be worth as much as $70 billion — are now in danger of turning to pulp after Hurricane Sandy flooded the downtown vault that had been storing them." width="300" /><div class="photo-credit" style="border: 0px; color: #777777; float: right; font-family: arial; font-size: 0.8em; list-style: none; margin: 0px 0px 5px 10px; outline: 0px; padding: 0px; text-align: right; vertical-align: top;">
Bloomberg</div>
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<strong style="border: 0px; color: #666666; list-style: none; margin: 0px; outline: 0px; padding: 0px; vertical-align: top;">LIQUID ASSETS:</strong> Thousands of bearer bonds — which could be worth as much as $70 billion — are now in danger of turning to pulp after Hurricane Sandy flooded the downtown vault that had been storing them.</div>
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DTCC — a depository controlled by the biggest financial firms on Wall Street — won’t say exactly what was in its vaults, how much the notes are worth, and who owns what.</div>
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Most of its member firms, including Deutsche Bank, JP Morgan Chase, Bank of America, UBS and Citi did not return calls.</div>
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The exception was Goldman Sachs, whose spokesman Michael DuVally confirmed Friday to The Post that his firm stored bearer bonds in the DTCC vaults. He acknowledged they would be nearly impossible to redeem if destroyed.</div>
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Yesterday morning, DuVally elaborated, and said the value of the Goldman bonds was “less than $1 million.” An hour later, he called back to say, “The market value of bearer bonds potentially impacted is less than $10,000.”</div>
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DTCC spokeswoman Judy Inosanto would say only that “a variety of equities and bonds” were damaged. “I can’t go into details. We do not provide values for security reasons.”</div>
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Even a contractor who bid on the cleanup and recovery job — the notes were drenched in diesel- and sewage-tinged water that filled 55 Water Street’s three sub-basements — clammed up when asked about the damage.</div>
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“It’s nobody’s business,” he said. “The public doesn’t need to know what’s in that vault. It’s between them and their customers.”</div>
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What is known is that for decades the vault housed millions of bearer bonds — worth many times that amount in dollars. In 1990, two-thirds of the 32 million notes in the vault were bearer bonds, DTCC records showed. Even as bearer bonds matured and the notes were removed, the vault continued to hold 5.4 million bearer bonds at late as 2003.</div>
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Experts say the only hope for saving the stacks of bonds would be to freeze-dry them in a cold vacuum chamber. As the air pressure in the chamber is reduced, and heat is increased, moisture in the documents would evaporate.</div>
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Security would have to oversee a tight chain of custody during the procedure, and the entire process could cost upward of $2 million.</div>
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Belfor, a Texas-based recovery firm rumored to have won the job, had a trailer parked outside 55 Water St. yesterday. When asked about a contract with Goldman to recover $70 billion in bearer bonds, Belfor spokeswoman Alex Gort said, “We have very strict confidentiality.”</div>
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Belfor workers at the site yesterday described a “complete restoration job” under “very high security,” but claimed to know nothing about the bonds.</div>
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“There are three vaults,” a hardhat said outside the building. “I wasn’t in the vault where the bonds are. Security is very tight down there. I know they were all under water. Billions of dollars’ worth, soaked. I know they are trying to pack them up.”</div>
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Bearer bonds are paper certificates, usually issued by governments, that are redeemable after a prescribed term. The bearer submits an attached coupon to receive payment. Because they are typically unregistered and can be used like cash, they were commonly used by those wishing to hide, and not pay taxes on, assets. They were banned in 1982.</div>
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But those that haven’t been fully redeemed remain in circulation.</div>
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Andrew Kintzinger, a securities lawyer, said that if a Wall Street firm were holding bonds as a custodian for investors, there would be electronic records documenting payments that would provide investors with proof of ownership.</div>
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But if Goldman or the other banks owned the damaged bonds themselves, redeeming them could be “a problem,” he said.</div>
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<em style="border: 0px; list-style: none; margin: 0px; outline: 0px; padding: 0px; vertical-align: top;">Additional reporting by Mark DeCambre and Kevin Fasick.</em></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-19167984883036168182012-11-17T15:30:00.001-08:002012-11-17T15:30:35.544-08:00As requested by the Court, on behalf of the Republ ic, I con finn that the Republic has complied, is complying, and will comply with the tenns of the March 5 Stay Order as SCI forth above in paragraph 3.<b style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;"><span style="color: red;">Hier erklären die Argys sich an die Direktiven von Judge Griesa halte.....(In Sachen pari passu, pro rata und Einschränkungen der Zahlungsweisen insbesondere in Bezug auf die BoNY Mellen</span></b><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">DECLARATION OF FRA CISCO G UILLERMO EGGERS</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">Pursuant to 28 U.S.C. § 1746, Francisco Guillermo Eggers declares as follows:</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">1. I am the National Director of the ationa! Bureau of Public Credit of the</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">Ministry of Economy and Public Finance of the Republic of Argentina (the "Republic").</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">2. I am familia r with the facts of th is case and submit this declaration on</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">behalf of the Republic and in support of the Memorandum of the Republic in Response to</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">Plaintiffs' Briero" Remand.</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">3. During the November 9, 2012 conference before the Court, the Court read</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">the following provision o f the Order dated March 5, 2012 (the "March 5 Stay Order'') into the</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">record:</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;"> "[1]0 secure Plaintiffs' rights during the pendency of the Republic's appeals of the</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">February 23, 2012 Orders to the Second Circuit, it is ordered that the Republic shall not during</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">the pendency of the appeal to the Second Circuit take any action to evade the directi ves of the</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">February 23, 2012 Orders in the event they are affinned, render them ineffective in the event</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">they are amnned, or diminish the Court's ability to supervise compliance with the February 23,</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">2012 Orders in the event they are affinned, inc luding without limitation, a ltering or amending</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">the processes or specific transfer mechanisms by which it makes payments on the Exchange</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">Bonds, without prior approval of the Court" (March 5 Stay Orde r 2).</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">4. </span><b style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;"><span style="color: red;"> As requested by the Court, on behalf of the Republ ic, I con finn that the </span></b><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><b style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;"><span style="color: red;">Republic has complied, is complying, and will comply with the tenns of the March 5 Stay Order </span></b><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><b style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;"><span style="color: red;">as SCI forth above in paragraph 3. </span></b><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">Case 1:08-cv-06978-TPG Document 400 Filed 11/16/12 Page 3 of 4I dec lare under penalty of perjury under the laws of the United States that the</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">foregoing is true and correct.</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">Executed on November 16,2012, in Buenos Aires</span><br style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;" /><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;">o </span><b style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; line-height: 21px;"><span style="color: red;">Gui11enno Eggers</span></b>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-46321191926022931932012-11-14T23:03:00.001-08:002012-11-14T23:03:37.854-08:00Carmine D. Boccuzzi Jr. von cgsh ist der führende Anwalt der Argys in den NYer Klagen....letzten Freitag wurde er von Griesa "rundgemacht" da Frau Kirchner und Lorenzino schon wieder sagten, Argy würde die Urteile nicht zahlen....<br />
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Carmine D. Boccuzzi Jr.</h1>
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<span style="color: #333333;">Carmine D. Boccuzzi is a partner based in the New York office. </span><br /><br /><span style="color: #333333;">Mr. Boccuzzi’s litigation and arbitration practice covers a broad range of complex civil litigation matters, with an emphasis on international disputes, including those involving foreign states and state-owned entities, and domestic disputes involving the capital markets and antitrust issues.</span><br /><br /><em style="color: #333333;">International Litigation and Arbitration</em><span style="color: #333333;">. Mr. Boccuzzi has litigated and arbitrated disputes as counsel both to foreign states and foreign state-owned instrumentalities. He most recently successfully defeated claims by bondholders against Petrobras, the Brazilian state-owned oil company, </span><em style="color: #333333;">Rogers v. Petroleo Brasileiro, S.A.,</em><span style="color: #333333;"> 2012 WL 806812 (2d Cir. March 13, 2012).</span><b><span style="color: red;"> Since 2002, Mr. Boccuzzi has successfully defended the Republic of Argentina in cases brought against it in connection with Argentina’s 2001 economic crisis, including obtaining the vacatur of over $2 billion in class judgments, <em>Seijas v. Argentina</em>, 606 F.3d 53 (2d Cir. 2010), and defeating attempts to attach assets of Argentina and its instrumentalities, <em>NML Captial Ltd. v. Argentina</em>, 652 F.3d 172 (2d Cir. 2011), <em>Aurelius Capital Partners, LP v. Republic of Argentina</em>, 584 F.3d 120 (2d Cir. 2009), 2010 WL 768874 (S.D.N.Y. Mar. 5, 2010), 2010 WL 2925072 (S.D.N.Y. July 23, 2010), and to enjoin the launch and subsequent closing of capital markets transactions by the Republic.<em>Rossini v. Argentina</em>, 2011 WL 2600404 (2d Cir. July 1, 2011); <em>Urban v. Argentina</em>, 2010 U.S. Dist. LEXIS 40580 (S.D.N.Y. Apr. 26, 2010)</span></b><span style="color: #333333;">. Mr. Boccuzzi obtained the vacatur of an attachment against an instrumentality of the Republic of Chile, successfully arguing that the court lacked jurisdiction to restrain an electronic funds transfer of a non-judgment debtor. </span><em style="color: #333333;">Macatra B.V. v. Destiny Navigation</em><span style="color: #333333;">, 2010 WL 339775 (S.D.N.Y. Jan. 27, 2010). </span><br /><br /><span style="color: #333333;">Mr. Boccuzzi represents domestic clients in international litigation and arbitration, including Citigroup in obtaining a series of injunctions against a former manager charged with overseeing its investment in the Brazilian telecommunications sector. </span><em style="color: #333333;">International Equity Investments, Inc. ("IEII") v. Opportunity Equity Partners, Ltd.</em><span style="color: #333333;">, 415 F. App’x 286 (2d Cir. 2011), and 246 F. App’x 73 (2d. Cir. 2007), affirming, 407 F. Supp. 2d 483 (S.D.N.Y. 2005) (enjoining series of agreements purporting to strip Citibank of control right in Brasil Telecom holding structure), </span><em style="color: #333333;">IEII v. Opportunity</em><span style="color: #333333;">, 427 F. Supp. 2d 503 (S.D.N.Y. 2006) (enjoining self-dealing agreement). Mr. Boccuzzi has also represented a Citigroup-related entity in four ICC arbitrations concerning corporate control of Brasil Telecom. </span><br /><br /><em style="color: #333333;">Civil Litigation</em><span style="color: #333333;">. Mr. Boccuzzi has substantial experience in complex civil litigation, including representing Citigroup and various affiliates in lawsuits arising out of the Bernard Madoff Ponzi scheme, </span><em style="color: #333333;">In re Kingate Mgm’t Ltd.,</em><span style="color: #333333;"> 2011 WL 1362106 (S.D.N.Y. March 30, 2011); </span><em style="color: #333333;">In re Fairfield Sentry Ltd.</em><span style="color: #333333;">, 458 B.R. 665 (S.D.N.Y. 2011). Mr. Boccuzzi represents international financial institutions in disputes concerning the proper reach of federal and state laws concerning the attachment and execution of assets. See, e.g., </span><em style="color: #333333;">Parbulk II AS v. Heritage Maritime, SA</em><span style="color: #333333;">, 35 Misc. 3d 235 (N.Y. Sup. Ct., June 7, 2011). In addition, Mr. Boccuzzi has represented financial institutions in obtaining the dismissal of antitrust claims under both the Sherman Act and New York State Donnelly Act, </span><em style="color: #333333;">Williams v. Citigroup, Inc.</em><span style="color: #333333;">, 659 F. 3d 208 (2d Cir. 2011), and 2012 WL 2377813 (N.Y. Sup. Ct., June 19, 2012), and represents financial institutions in complex commercial matters, including</span><em style="color: #333333;">Mashreqbank v. Ahmad Hamad Al Gosaibi</em><span style="color: #333333;">, N.Y. Sup. Ct., and </span><em style="color: #333333;">In re Stanwich Financial Services</em><span style="color: #333333;">, 317 B.R. 224 (Bankr. D. Conn. 2004). </span><br /><br /><span style="color: #333333;">Mr. Boccuzzi has expertise in complex derivative and other structured instruments, having represented a variety of institutions, both domestic and international, in disputes involving derivatives including various creditors in the Lehman Brothers Bankruptcy proceeding. Mr. Boccuzzi represented various Fitch Ratings entities in litigation in California state court concerning the rating of Structured Investment Vehicles. Notable other past representations include Kidder Peabody in the bankruptcy proceedings and investor litigations surrounding the collapse of the Granite funds, </span><em style="color: #333333;">Primavera Familienstiftung v. Askin</em><span style="color: #333333;">, 130 F. Supp. 2d 450 (S.D.N.Y. 2001), </span><em style="color: #333333;">ABF Capital Management v. Askin Capital Management L.P.</em><span style="color: #333333;">, 957 F. Supp. 1308 (S.D.N.Y. 1997),</span><em style="color: #333333;">Primavera Familienstiftung v. Askin</em><span style="color: #333333;">, 1996 WL 494904 (S.D.N.Y. 1996). </span><br /><br /><em style="color: #333333;">Capital Markets and Securities Litigation</em><span style="color: #333333;">. Mr. Boccuzzi represents parties in mergers and acquisition-related litigation, including the acquirer in </span><em style="color: #333333;">In re: Ness Techs Shareholders Litig.</em><span style="color: #333333;">, 2011 Del. Ch. LEXIS 107 (Del. Ch. 2011), and </span><em style="color: #333333;">Botton v. Ness Techs Inc.</em><span style="color: #333333;">, 2011 U.S. Dist. LEXIS 85950 (D.N.J. 2011). He succeeded in obtaining the dismissal of numerous derivative actions brought against his clients, members of the Board of Directors of Citigroup, alleging that the directors failed to implement appropriate internal control systems, which dismissal was affirmed on appeal to the Delaware Supreme Court, </span><em style="color: #333333;">David B. Shaev Profit Sharing Account v. C. Michael Armstrong, et al.</em><span style="color: #333333;">, C.A. No. 1449-N (Del. Ch. Feb. 13, 2006), aff’d, (Del. Ct. Nov. 6, 2006); </span><em style="color: #333333;">Fink v. Weill</em><span style="color: #333333;">, No. 02 Civ. 10250, 2005 WL 2298224 (S.D.N.Y. Sept. 19, 2005); </span><em style="color: #333333;">In re Citigroup Inc. Shareholders Litig.</em><span style="color: #333333;">, C.A. No. 19827, 2003 WL 21384599 (Del. Ch. June 5, 2003); in obtaining dismissal of securities fraud claims brought against over a dozen investment banks by classes of holders of debt and equity securities issued by HealthSouth Corporation, </span><em style="color: #333333;">In re HealthSouth Corporation Securities Litig.</em><span style="color: #333333;"> (N.D. Ala.); in obtaining dismissal of an action asserting securities fraud claims against Smith Barney arising out of the $1.9 billion IPO of Genuity, Inc., </span><em style="color: #333333;">Davidoff v. Farina</em><span style="color: #333333;">, No. 04 Civ. 7617, 2005 WL 2030501 (S.D.N.Y. Aug. 22, 2005); in the affirmance of a defense verdict he achieved on behalf of FleetBoston Financial Group in an action seeking in excess of $300 million arising from the administration of a benefits plan, </span><em style="color: #333333;">Feldman v. National Westminster Bank, N.A.</em><span style="color: #333333;">, (Sup. Ct., N.Y. County, June 27, 2002), aff’d, (1st Dep’t Mar. 20, 2003), lv. denied, (N.Y. Ct. Apps. June 10, 2003); as well as the dismissal of related actions, </span><em style="color: #333333;">Chairnoff v. National Westminster Bank</em><span style="color: #333333;">, 309 F. Supp. 2d 581 (S.D.N.Y. 2004), </span><em style="color: #333333;">Hahn v. National Westminster Bank, N.A.</em><span style="color: #333333;">, 99 F. Supp. 2d 275 (E.D.N.Y. 2000). </span><br /><br /><em style="color: #333333;">Pro Bono Litigation</em><span style="color: #333333;">. In addition to commercial matters, Mr. Boccuzzi has represented clients in a range of pro bono matters involving Constitutional and statutory issues in both the civil and criminal law contexts, </span><em style="color: #333333;">Johnson v. Tennessee</em><span style="color: #333333;">, 2011 WL 6157492 (Tenn. Crim. App. 2011); </span><em style="color: #333333;">In re New York Public Interest Research Group v. Giuliani</em><span style="color: #333333;">, 228 A.D.2d 276 (1st Dep’t 1998). </span><br /><br /><span style="color: #333333;">Mr. Boccuzzi is a member of the Bar in New York and is admitted to the practice before the U.S. Supreme Court, the United States Court of Appeals for the Second Circuit, District Courts for the Southern and Eastern Districts of New York and the Eastern District of Michigan. He is a member of the Federal Bar Council and sits on the board of New York Lawyers for the Public Interest. </span><br /><br /><span style="color: #333333;">Mr. Boccuzzi is distinguished as one of the best lawyers for international arbitration in Latin America by </span><em style="color: #333333;">Chambers Global</em><span style="color: #333333;">,</span><em style="color: #333333;">Chambers Latin America </em><span style="color: #333333;">and</span><em style="color: #333333;"> The Legal 500 Latin America</em><span style="color: #333333;">. </span><br /><br /><span style="color: #333333;">As a recognized leader in the field, Mr. Boccuzzi publishes articles and presents at seminars on a variety of litigation and international arbitration topics. His recent works include "International Legal Developments in Review 2011: Foreign Sovereign Immunities Act,"</span><em style="color: #333333;">The International Lawyer</em><span style="color: #333333;">, Spring 2012. He is also a contributor to the treatise, </span><em style="color: #333333;">U.S. Regulation of the International Securities and Derivatives Markets</em><span style="color: #333333;"> (10th ed.). Mr. Boccuzzi is also co-author, along with Cleary Gottliebl partners Thomas J. Moloney and Roger A. Cooper of Chapter 70, "Derivatives" in the treatise </span><em style="color: #333333;">Business and Commercial Litigation in Federal Courts</em><span style="color: #333333;"> (3d Edition). </span><br /><br /><span style="color: #333333;">Mr. Boccuzzi joined the firm in 1994 and became partner in 2003. He received a J.D. from the Yale Law School in 1994 and a B.A., </span><em style="color: #333333;">magna cum laude</em><span style="color: #333333;">, from Yale College in 1990. </span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-66217467764444859582012-11-14T04:12:00.002-08:002012-11-14T04:12:59.825-08:00Greisa then threatened to sanction Argentina’s conduct. “Argentina has the duty to comply with the judicial decisions of the U.S.,” Griesa said. And he warned: “Our courts are not helpless. We can take measures, which I will not discuss here, to punish Argentina’s conduct,” he said.<br />
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<i><span style="font-family: 'Times New Roman', serif; font-size: 14pt;">Clarin<u></u><u></u></span></i></div>
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<b><span style="font-family: 'Times New Roman', serif; font-size: 14pt;">The fund NML must tell the judge today how much it wants to collect<u></u><u></u></span></b></div>
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<b><span style="font-family: 'Times New Roman', serif; font-size: 12pt;"><u></u> <u></u></span></b></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">Tuesday, November 13, 2012<u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">The vulture fund NML must file today a brief before US Judge Thomas Griesa in which it must detail what is the amount it aspires to collect from Argentina in exchange for cancelling its demand for bonds from the country that it holds and that it didn’t enter with in the swaps of 2005 and 2010.<u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">NML is the same fund that moved against Argentina in Ghana and managed to end up with the Frigate Libertad detained there. In the US, the judiciary of that country also ruled in favor of an NML demand: at the end of October, the Court of Appeals upheld a previous ruling from Griesa, judge of the Southern District of Manhattan, that ordered Argentina to pay all the bondholders, those who entered or not, in a proportional manner. That means that on December 2, the payment day for bondholders that entered the debt swap, Argentina also will have to begin paying the vulture funds.<u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">Last week, Griesa told NML to specify the amount of its demand as well as told Argentina to offer a payment plan. The attorneys representing the country have until 72 hours after NML’s filing: the deadline comes on Friday.<u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">In that context, yesterday President Cristina Kirchner let it be understood once again that she is not ready to abide by the decision of the US courts.<u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">“We will not give in,’ said Nestor Kirchner on March 1, 2004, and so says this President eight years later,” she warned, during an event in Villa Constitution.<u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">On Friday, in a hearing before a full courtroom in New York, Griesa had already asked on four occasions if Cristina Kirchner had said strictly that she would not abide by the decision of the Court of Appeals. The attorney representing Argentina in that case, Carmine Bocuzzi, responded evasively in every one of the four occasions. <b><span style="color: red;">Greisa then threatened to sanction Argentina’s conduct. “Argentina has the duty to comply with the judicial decisions of the U.S.,” Griesa said. And he warned: “Our courts are not helpless. We can take measures, which I will not discuss here, to punish Argentina’s conduct,” he said.</span></b><u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">The warning came after an attempt by the legal representative to delay the process: he’d asked for a month to respond to NML’s demand. Griesa granted only three days. <u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">According to what Griesa put forth, it would have been acceptable if Cristina Kirchner had said that she will continue appealing the decisions. But he made it clear that he will not accept the President saying directly that she will not abide by what a judicial ruling says.<u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">“If there is any thinking on the part of the Argentine Republic to defy and evade the recent decision, that thinking should be seriously reconsidered and set aside,” the judge said.<u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">Almost as a reminder, Judge Griesa recalled that the rulings of the US Court of Appeals are “binding” because Argentina, when it issued the bonds that are in default since 2001, had ceded its jurisdiction to the courts of the United States.</span><span style="font-family: 'Times New Roman', serif; font-size: 14pt;"><u></u><u></u></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 14pt;"><u></u> </span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-80115836609967731182012-11-13T04:58:00.001-08:002012-11-13T04:58:11.306-08:00Pari Passu Endgames posted by Anna Gelpern<br />
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Pari Passu Endgames</h3>
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posted by Anna Gelpern</div>
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It was supposed to be a scheduling hearing, and I was supposed to be in New York for a<a href="http://www.brooklaw.edu/newsandevents/events/2012/11-09-2012.aspx?cat=All%20Events" style="color: #003366;" target="_self">conference</a>. So I popped by Judge Griesa's courtroom on Friday to see about <a href="http://www.creditslips.org/creditslips/2012/10/unknown-unknowns-in-pari-passu-and-more-to-come.html" style="color: #003366;" target="_self">next steps in <em>NML v. Argentina</em></a>, and stumbled into a rave. Just about every analyst, journalist, and lawyer who has ever had anything to do with Argentina was on hand, along with the protagonists. They even set up an overflow courtroom, but the folks next to me preferred to get subway-cozy just to see it all in person.</div>
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The basic <a href="https://mm.jpmorgan.com/EmailPubServlet?h=-clnf6fu&doc=GPS-986981-0.html" style="color: #003366;" target="_self">outcome</a> is well-known by now: NML will file their brief by tomorrow on all the issues remanded to the District Court; Argentina and any third parties that care to intervene must respond by Friday; NML's reply is due by November 19. There will then be a hearing before Judge Griesa; he promised to rule before December 1 -- though perhaps even before -- with the goal of getting the Second Circuit's final chop in time for Argentina to make (or not make) the payments due to the Exchange Bondholders and NML on December 2. The stay on the injunction is in effect until the District Court rules ("until I have made my ruling"), but could be extended "until the Court of Appeals does further work" ("... but the Court of Appeals will not say nothing!").</div>
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Expect amicus briefs from the Bank of New York as trustee (present but quiet in the courtroom) and exchange bondholders. Watch for briefs from the U.S. Government, the New York Fed, the Clearing House, DTCC, international organizations, perhaps others. The <a href="http://www.creditslips.org/creditslips/NML%20note%20to%20Griesa%20to%20expedite-attachments%20including%20amended%20order.pdf" style="color: #003366;" target="_self">expansive list of third-party targets</a> in the plaintiffs' proposed order (Attachment B), and the <a href="http://www.ca2.uscourts.gov/decisions/isysquery/698b4d40-9200-4c40-957f-c2bdf0a6374d/1/doc/12-105_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/698b4d40-9200-4c40-957f-c2bdf0a6374d/1/hilite/" style="color: #003366;" target="_self">Second Circuit's enigmatic reference</a> to third parties beyond intermediary banks (p. 28), may have disturbed a hornet's nest. My view continues to be that the outcome depends heavily on the number and strength of third-party interventions. The trouble is that the biggies require quite a bit of process to come in, and would find it hard to turn on a dime in the few days allotted (less holidays and storm displacement). Conceivably the courts could even ask for briefs from the official actors later--so I am not sure what to read into any absences on Friday.</div>
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What follows is an attempt to fill in the color and the implications.</div>
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First, the color.</div>
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<li><em>Few thought it would get this far</em>. The judge issued an injunction that piggybacks on the payment mechanism set up between Argentina and its bondholders, apparently without giving much thought to how the mechanism worked. The first few moments of the hearing passed spelling out how the money flows from Argentina to the Bank of New York in Buenos Aires, then to DTCC and Euroclear, then to their respective members, etc etc. Argentina's lawyers had to repeat and clarify quite a few times. Separately, Bank of New York showed up for the first time, and lawyers for the performing bond holders asked for "a seat at the table" --rather late in the program, as <a href="http://en.wikipedia.org/wiki/Theodore_Olson" style="color: #003366;" target="_self">Ted Olson</a> pointed out for Plaintiffs NML-- again, presumably because they never thought pari passu would be interpreted to implicate them.</li>
<li><em>All love long gone for Argentina</em>. The judge spent much of the hearing pummeling the Republic's lawyers for its politicians' press bluster, taking his talking points from the Plaintiffs' letter. In what must have been a feast for globalization nerds, the New York court took statements made for domestic political and global financial market consumption as targeted insults against itself. Bottom line: Argentina (not Cleary) must submit an affidafit by Friday to the effect that it is not trying to evade the court's injunctions. There has been some speculation about the Government refusing to do it, or clever phrasing -- but I just cannot see the lawyers walking into that courtroom again without a reasonably straightforward statement along the lines they were told to bring.</li>
<li><em>This cannot last much longer</em>. It is awkward to litigate a case before a court for a decade while refusing to pay that same court's judgments. The most poignant of the judge's many dramatic excursions is worth quoting at length: "The Republic as well as the Plaintiffs have had an enormous amount of service both from the District Court and the Court of Appeals ... The Republic was treated fairly and has won most of those litigated matters. In certain instances, where the Plaintiffs won in the District Court, it was reversed by the Appeals Court. The Republic has had the benefit of service of the District Court and the Court of Appeals, and has been treated with utmost fairness. Now the Republic did not prevail in this case. If the Court of Appeals ruling stands--and it stands now--the ruling adverse to the position of the Republic ... If--I emphasize if--there is any thought on the part of the Republic to defy and evade the current ruling, then that thought should be seriously reconsidered and set aside. I am repeating myself, but I want to repeat myself. ... The Republic should realize that its record of defiance of judgments already entered is beginning--perhaps too late--to be viewed very negatively, and that is certainly evidenced in the Court of Appeals discussion." A peek behind the curtain?</li>
<li><em>The judge does not rule for the market</em>. At least not the market in Argentine debt. Another highlight of Friday's hearing came when a lawyer for bondholders who participated in the exchange exclaimed that his clients were "<a href="http://www.nypost.com/p/news/business/hedgies_held_hostage_by_pirate_singer_6xWEFnl1y3EcHzce1yS3LI" style="color: #003366;" target="_self">being held hostage</a>" and "suffering." Judge Griesa's response? Take it up with Argentina, because they can pay both. (This strikes me as a factual determination that depends on the pari passu formula, but we are on color, not fact.) "I don't sit here planning to affect the market. My job is not to affect the market, intentionally or not."</li>
<li><em>The judge is ready to think outside the box</em>. What might seem like protesting too much--"This court is not powerless ... steps can be taken to sanction ... I will not discuss ... means for dealing with that ..."--could also be read as readiness to throw caution to the winds. With the apparent blessing of the Second Circuit. (Here Plaintiffs' repeated suggestion that Argentina could post a bond bears watching.)</li>
<li><em>Ted Olson is a soothing man</em>. Whenever Judge Griesa showed the slightest bit of uncertainty or self-doubt (as in the pari passu formula or the duration of the stay), counsel for the Plaintiffs was there to tell him that he had been right and righteous all along, crystal-clear in every respect, and was therefore resoundingly affirmed. Argentina's response--"but this is really complicated"--is complicated by the fact that it is simply refusing to pay.</li>
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Next, the near-term implications. These are all about the three December payments due on the performing debt, and the potential triggering of Credit Default Swaps on Argentina.</div>
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<li><em>December payments are in limbo.</em> I find it hard to believe that everything will be resolved in time for the first (small) payment to be made on December 2; however, I do not believe that Argentina will get a quick pass until March. Judge Griesa made no secret of his plan to keep up the pressure on Argentina; telling him that Argentine markets are tanking just confirms that his startegy is working. If he extends the stay, it will be in dribs and drabs. The biggest payment is on the GDP warrants on December 15; if the stay continues past then, March looks more likely.</li>
<li><em>Payment workarounds are possible, but costly</em>. <a href="http://newsandinsight.thomsonreuters.com/Securities/News/2012/03_-_March/U_S__court_ends_claims_on_Argentina_funds_at_N_Y__Fed/" style="color: #003366;" target="_self">The money belongs to the bondholders as soon as it hits BoNY in Argentina</a>, but Argentina's payment obligation is not satisfied by the terms of the indenture until the payments "are received by the Holders of the Securities." This is an unusual formulation. Argentina can pay BoNY in Buenos Aires, though even that is contrary to the terms of the injunction. What happens next depends on what BoNY is willing or is allowed to do, and what bondholders are willing to accept. Without more from the courts, being clever is likely to be read as evading the injunction, and will cost both Argentina and BoNY in the litigation. If BoNY resigns, the question comes back for any successor that might be brave (or compensated) enough to step in its shoes.</li>
<li><em>Formula magic is beguiling but unlikely</em>. Some folks have suggested that the only equitable outcome on remand would be for Judge Griesa to order Argentina to <a href="http://ftalphaville.ft.com/2012/11/09/1251391/an-argentine-formula/" style="color: #003366;" target="_self">pay NML the exchange terms,</a> without extinguishing the underlying obligaiton. This would have the Federal District Court effectively simulate bankruptcy cramdown treatment, in line with the idea put forward by <a href="http://dspace.cigilibrary.org/jspui/bitstream/123456789/9363/1/Sovereign%20Debt%20Restructuring%20The%20Judge%20the%20Vultures%20and%20Creditor%20Rights.pdf?1" style="color: #003366;" target="_self">Marcus Miller and Dania Thomas</a> some years ago. Courts do have the power to craft an equitable remedy within reasonable bounds of discretion. This court's repeated reference to "some" payment, as well as Plaintiffs' emphasis on "equal payment" as distinct from obligation ranking, seem to point to a payment remedy delinked from the terms of the bond. But most court specialists I bug scoff at the idea as just "making it up." You can bet lots of money that Elliott is not in this for the exchange terms, and would not take it lying down. Their <a href="http://www.creditslips.org/creditslips/NML%20note%20to%20Griesa%20to%20expedite.pdf" style="color: #003366;" target="_self">letter to the court</a> asks for full principal and past due interest. </li>
<li><em>CDS could trigger. </em>If there is a "failure to pay" on the part of Argentina, there is a "credit event" under the CDS contracts referencing Argentina. There is some question about whether there is a "failure to pay" if Argentina transfers funds to BoNY in Buenos Aires, but BoNY fails to pay the bondholders in New York. There is just barely enough fog in the indenture to give ISDA and its lawyers some room for interpretation (though the "received by Holders" language in the indenture cousels caution). The rumor mill has it that Elliott holds lots of CDS on Argentina;<a href="http://dc.isda.org/about-dc-committees/current-dc-members/" style="color: #003366;" target="_self">it is on</a> the <a href="http://dc.isda.org/" style="color: #003366;" target="_self">Determinations Committee</a> charged with deciding whether there would be a credit event. If the rumor is true, this merits a separate post, since the incentives are not clear-cut here.</li>
<li><em>Sympathetic retail holders may or may not benefit</em>. German and Italian retirees are most likely to benefit from NML's victory if they have not reduced their contract claim to a judgment. If they hold judgments, they may no longer hold contracts with pari passu clauses under the merger doctrine. It bears emphasis that selling such risky investments to retail investors was and is wrong, not least because their enforcement hinges on highly specialized litigation strategies. <ul style="margin-bottom: 10px; margin-top: 10px;">
<li>If Argentina pays NML disproportionately, one interesting move would be for all the other defaulted holders with pari passu clauses to go after NML the same way as NML has gone after the exchange bondholders. Pari passu would then become all for one, one for all. More on this in another post.</li>
</ul>
</li>
</ul>
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Last, the big picture. I am coming around to the view that this is <a href="http://blogs.reuters.com/felix-salmon/2012/10/27/argentinas-stunning-pari-passu-loss/" style="color: #003366;" target="_self">the end of sovereign debt restructuring as we know it</a>. This may be good, bad, or medium -- but it is surely big.</div>
<ul style="margin-bottom: 10px; margin-top: 10px;">
<li><em>Ending the immunity-bankruptcy standoff. </em>Sovereigns did not need bankruptcy protection because their debt was effectively unenforceable. Holdouts could create enough of a nuisance to force settlements, but that path was for the select few. The result was surely perverse -- countries could not be made to pay, but they could not get debt discharge either -- and they had no clue where the next wild enforcement attempt would come from. Argentina and Elliott show what happens when you take this "nonsystem" to the limit. It is unattractive. Now it might turn out that sovereign debt is enforceable after all ... against third parties. Bankruptcy time?</li>
<li><em>No incentive to participate. </em>Imagine a country running out of money. It wants to exchange its old bonds for new ones the old fashioned way. Until now, would-be participants weighed the risk of protracted limbo, against the risk of getting paid a little while a fiew holdouts got paid a lot. Holdouts ran the risk of chasing a government around the world for years. The few that did kept the system in balance. Now would-be participants, fiscal agents, trustees, ... closing dinner caterers ... are signing up to be defendants in holdout litigation. <a href="http://www.creditslips.org/creditslips/2012/05/sovereign-restructuring-after-nml-v-argentina-cacs-dont-make-pari-passu-go-away.html" style="color: #003366;" target="_self">No, CACs make no difference</a>. <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2144932" style="color: #003366;" target="_self">See Greece</a>. (But see more on aggregation below.) </li>
<li><em>Preferred Creditor Status on the table. </em>By its terms, the District Court and Second Circuit interpretaiton of pari passu covers payments to international organizations, which have enjoyed informal preferred creditor status for decades. The Second Circuit repeats the Plaintiffs' contention that "commercial creditors never were nor could be on equal footing with the multilateral organizations"--but that one comes straight out of thin air. The institutions have<a href="http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=1514992" style="color: #003366;" target="_self">scrupulously avoided claiming formal preference</a>, and have even gotten into a bit of a tiff with the EU over Europe's attempt to formalize preference in a <a href="http://www.european-council.europa.eu/media/582311/05-tesm2.en12.pdf" style="color: #003366;" target="_self">treaty</a>. Reckoning time has come.</li>
<li><em>No backup system</em>. In the words of Judge Griesa, "I repeat myself--but I want to repeat myself"--this decision caught a lot of folks by surprise. There is no Plan B.<ul style="margin-bottom: 10px; margin-top: 10px;">
<li>The official sector has rejected a <em><a href="http://www.imf.org/external/pubs/ft/exrp/sdrm/eng/index.htm" style="color: #003366;" target="_self">treaty regime</a></em> that might have helped address the holdout dilemma, though it was far from comprehensive in coverage.</li>
<li>The official sector's preferred solution -- prompting <em>contract change</em> for pari passu on the model of the <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=932942" style="color: #003366;" target="_self">CAC initiative in 2002-2003 </a>-- would face opposition on impunity/creditor rights grounds, would take years, and is unlikely to approach anything like comprehensive coverage. Even so, I would not be surprised to see a sell-side outfit marketing liability management strategies to reform pari passu and introduce heretofore rare aggregated CACs to help reduce (not eliminate) NML-type risks. Where single-series CACs make no difference, aggregation might help on the margins. Even then, an issue could drop out of an aggregated restructuring, or a holdout could find a stand-alone instrument (a loan?) with a pari passu clause, and proceed to enforce against all the sheep that agreed to be shorn.</li>
<li><em>Regulatory intervention</em>, for example, requiring narrowly-worded pari passu clauses as a condition of accessing payment systems such as Fedwire, seems like a remote possibility at this stage. </li>
<li>The last option is a national <em>statutory fix</em> to insulate payment and clearing systems, and maybe a broader set of third parties. Again, this is likely to face opposition, take time, and leave big holes.</li>
</ul>
</li>
<li><em>Off to London?</em> It is tempting to think that with New York law in limbo, sovereign issuers will just decamp to London, where the policy establishment <a href="http://www.creditslips.org/creditslips/2012/11/www.fmlc.org/Documents/fmlc79mar_2005.pdf" style="color: #003366;" target="_self">seems more likely to favor a narrow interpretation of pari passu</a>. I am skeptical for two reasons.<ul style="margin-bottom: 10px; margin-top: 10px;">
<li>First, there are investors disposed to see the broad interpretation as long-overdue debtor discipline; these may flock to New York and drag some governments with them. There were plenty of folks who thought mutual assured destruction was a stable way of running the world -- and it was for a while. <a href="http://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=1052&context=facpub&sei-redir=1&referer=http%3A%2F%2Fwww.google.com%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3Delliott%2520associates%2520v.%2520republic%2520of%2520peru%2520brussels%26source%3Dweb%26cd%3D10%26ved%3D0CGUQFjAJ%26url%3Dhttp%253A%252F%252Fscholarship.law.georgetown.edu%252Fcgi%252Fviewcontent.cgi%253Farticle%253D1052%2526context%253Dfacpub%26ei%3DZumhULH4JYzUyQG0-oGoBw%26usg%3DAFQjCNHgLaTEy4lMhyboddPmcKQgNYGjsg#search=%22elliott%20associates%20v.%20republic%20peru%20brussels%22" style="color: #003366;" target="_self">Put differently, I am not at all convinced that sovereign debt prices will tank across the board with this decision.</a> For some, it is a positive.</li>
<li>Second, it is far from settled that English courts will go narrow after New York went broad. There is a reason people worried about <a href="http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=2070&context=faculty_scholarship&sei-redir=1&referer=http%3A%2F%2Fwww.google.com%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3Delliott%2520associates%2520v.%2520republic%2520of%2520peru%2520brussels%26source%3Dweb%26cd%3D3%26ved%3D0CD0QFjAC%26url%3Dhttp%253A%252F%252Fscholarship.law.duke.edu%252Fcgi%252Fviewcontent.cgi%253Farticle%253D2070%2526context%253Dfaculty_scholarship%26ei%3DZumhULH4JYzUyQG0-oGoBw%26usg%3DAFQjCNGeH6NoKG8YfP0jJNwhkYBkg8_ZeA#search=%22elliott%20associates%20v.%20republic%20peru%20brussels%22" style="color: #003366;" target="_self">Brussels in 2000</a>. Pari passu has long gone global. </li>
</ul>
</li>
</ul>
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All this to say we live in interesting times, and will be smarter in a couple of weeks.</div>
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November 13, 2012 at 12:44 AM in <a href="http://www.creditslips.org/creditslips/sovereign-debt/" style="color: #003366;">Sovereign Debt</a></div>
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<a href="http://www.creditslips.org/creditslips/2012/11/pari-passu-endgames.html">http://www.creditslips.org/creditslips/2012/11/pari-passu-endgames.html</a></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-21573698505593642202012-11-13T04:54:00.002-08:002012-11-13T04:54:37.127-08:00Unser Mann für pari passu in New York<img src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0Ns-a7X6N6NgBND1jCk4OvDu1Z039GzZa1aYJFqecr-8ypAcIWMYTpqJ5u4p4lAtQ5BmlZhHxu1nUGxbF7UJRzp2GofhViXQA7OFf3bHisLF98y8XmOvqN_yVfZeWMWoVGvdJiWXJ1FU/s400/judge+thomas+griesa.jpg" />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-78752881271112747652012-11-10T19:08:00.001-08:002012-11-10T19:08:35.242-08:00"There cannot be a payment to exchange bondholders without a court ordered payment to the plaintiffs," Griesa said. // geprellte Bondholder sind nicht hilflos vs unwillige Sovereigns.....Fallstudie Argy<br />
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<a href="http://rolfsgriechenlandblog.blogspot.de/2012/11/there-cannot-be-payment-to-exchange.html" style="color: #ff1900; text-decoration: none;">"There cannot be a payment to exchange bondholders without a court ordered payment to the plaintiffs," Griesa said. // geprellte Bondholder sind nicht hilflos vs unwillige Sovereigns.....Fallstudie Argy</a></h3>
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<img alt="Overview of the Buenos Aires skyline. REUTERS Enrique Marcarian" class="imageWrap" id="ctl00_ctl00_PageContent_MainColumn_mThumbnailImage" src="http://newsandinsight.thomsonreuters.com/uploadedimages/Reuters_Content/2012/11_-_November/Overview%20of%20the%20Buenos%20Aires%20skyline.%20REUTERS%20Enrique%20Marcarian_Small.jpg" style="-webkit-box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; background-color: white; background-position: initial initial; background-repeat: initial initial; border: 0px none rgb(238, 238, 238); box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; color: #333333; float: left; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 10px; max-width: 100px; padding: 3px 10px 3px 0px;" title="Overview of the Buenos Aires skyline. REUTERS Enrique Marcarian" /><br /><h3 style="background-color: white; color: #33729b; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 2em; font-weight: normal; margin: 4px 0px 5px; padding: 0px; position: relative;">
<span id="ctl00_ctl00_PageContent_MainColumn_mTitle">U.S. judge warns Argentina to comply with bondholder court order</span></h3>
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<span class="floatLeft" id="ctl00_ctl00_PageContent_MainColumn_mDate" style="float: left;">11/9/2012</span><span class="comments" id="ctl00_ctl00_PageContent_MainColumn_mComments" style="background-image: url(http://newsandinsight.thomsonreuters.com/Web/Images/Icons/Comment.gif); background-position: 0% 50%; background-repeat: no-repeat no-repeat; clear: both; float: right; line-height: 1.4em; margin-bottom: 0px; margin-top: 10px; min-height: 0px; padding-left: 20px; position: relative;">COMMENTS (0)</span></div>
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By <a href="http://newsandinsight.thomsonreuters.com/Legal/SearchResults.aspx?folder_id=0&search_text=nate+raymond+" style="color: #276a97; text-decoration: none;" title="Nate Raymond">Nate Raymond</a></div>
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NEW YORK, Nov 9 (Reuters) - A U.S. judge on Friday told Argentina it should not even consider evading a recent ruling requiring it to pay bondholders who did not participate in two major debt restructurings after the country's 2002 default.</div>
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U.S. District Judge Thomas Griesa in Manhattan said Argentina must not seek to avoid making payments to the holdout bondholders in accordance with an Oct. 26 ruling from the 2nd U.S. Circuit Court of Appeals.</div>
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"If, and I emphasize if, there is any thought on the part of the Republic to defy and evade the current ruling, then that thought should be seriously reconsidered and set aside," Griesa told Argentina's lawyers.</div>
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Griesa's comments came in response to remarks by Argentine President Cristina Fernandez de Kirchner, who said the country would not pay "one dollar to the 'vulture funds'."</div>
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The holdouts include Elliott Management Corp affiliate NML Capital Ltd and the Aurelius Capital Management funds. They are suing to recoup $1.4 billion of defaulted debt.</div>
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Griesa also said he would move to quickly resolve questions regarding how the payments will be made by Dec. 2, when Argentina is due to make the first of three payments totaling more than $3 billion to bondholders.</div>
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The biggest payout will come Dec. 15 when Argentina has to pay holders of its growth-linked GDP warrants, issued during its harsh 2005 and 2010 debt swaps.</div>
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Friday's hearing was the latest development in an array of U.S. litigation stemming from the country's sovereign default.</div>
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The 2nd Circuit ruled that Argentina had improperly discriminated against bondholders who did not participate in the country's debt swaps. About 93 percent of creditors entered the swaps, exchanging their defaulted debt for new bonds.</div>
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The appeals court said Argentina had violated bond provisions requiring it to treat bondholders equally by paying those who did participate in the restructurings ahead of the holdouts.</div>
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The ruling sent Argentine bond prices reeling and prompted a sovereign debt downgrade by Standard & Poor's.</div>
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Following the appeals court ruling, NML Capital asked Griesa in a Nov. 6 letter to rule quickly on two issues that the 2nd Circuit sent back to the trial judge to determine.</div>
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Among those issues was how the bond payment formula would operate. It also asked the judge to determine how the injunction would apply to third parties, including intermediary banks.</div>
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COURTS 'NOT HELPLESS'</div>
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NML's letter cited remarks by the president and Economy Minister Hernan Lorenzino stating they would not pay the holdout creditors. The officials also vowed to continue servicing the country's restructured debt.</div>
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Those statements prompted a lengthy rebuttal from Griesa on Friday. The judge said any move by Argentina to alter the payment mechanisms for the bonds to skirt the 2nd Circuit ruling would violate a court order from February.</div>
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<b><span style="color: red;">"There cannot be a payment to exchange bondholders without a court ordered payment to the plaintiffs," Griesa said.</span></b></div>
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Griesa grilled Argentina's lawyer, Carmine Boccuzzi, on whether Argentina's leaders were moving to defy the court order.</div>
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<b><span style="color: red;">He ordered that Argentina submit an affidavit attesting that it would comply with the February order. He added that "steps can be taken to sanction the Republic."</span></b></div>
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"Our courts are not helpless," he said.</div>
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<b><span style="color: red;">Boccuzzi told the judge that Argentina had complied with the February order and had not made any changes to the way bondholders were paid.</span></b></div>
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"They are not thumbing their nose at your honor," he said.</div>
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At the urging of NML, Griesa scheduled a quick timetable to resolve the questions posed by the 2nd Circuit, with briefing scheduled for completion by mid-November.</div>
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He said he intends to rule before the Dec. 2 payment so the holdout bondholders have a chance to get a cut. A stay on payments to NML and the other bondholders remains in place at least until he issues a ruling, he said.</div>
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<b><span style="color: red;">"They have been waiting for years to get some money," he said. "And they're going to get something."</span></b></div>
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The case is NML Capital Ltd et al v. Argentina, U.S. District Court, Southern District of New York, No. 08-06978.</div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-62199000206201733182012-11-10T01:12:00.000-08:002012-11-10T01:12:11.483-08:00Elliott greift weit aus in die Abwicklungs- und Clearingsysteme um sein Geld von Argy zu bekommen<br />
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<a href="http://rolfsgriechenlandblog.blogspot.de/2012/11/elliott-greift-weit-aus-in-die.html" style="color: #ff1900; text-decoration: none;">Elliott greift weit aus in die Abwicklungs- und Clearingsysteme um sein Geld von Argy zu bekommen</a></h3>
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<br />“Agents and Participants” refer to those persons and entities who act as the<br />Republic’s agents, or act in active concert or participation with the<br />Republic or its agents, to assist the Republic in fulfilling its payment<br />obligations under the Exchange Bonds, including: (1) the indenture<br />trustees and/or registrars under the Exchange Bonds (including but not<br />limited to The Bank of New York Mellon f/k/a The Bank of New York);<br />(2) the registered owners of the Exchange Bonds and nominees of the<br />depositaries for the Exchange Bonds (including but not limited to Cede &<br />Co. and The Bank of New York Depositary (Nominees) Limited) and any<br />institutions which act as nominees; (3) the clearing corporations and<br />systems, depositaries, operators of clearing systems, and settlement agents<br />for the Exchange Bonds (including but not limited to the Depository Trust<br />Company, Clearstream Banking S.A., Euroclear Bank S.A./N.V. and the<br />Euroclear System); (4) trustee paying agents and transfer agents for the<br />Exchange Bonds (including but not limited to The Bank of New York<br /><br />(Luxembourg) S.A., and The Bank of New York Mellon (including but<br />not limited to The Bank of New York Mellon (London))); and (5)<br />attorneys and other agents engaged by any of the foregoing or the<br />Republic in connection with their obligations under the Exchange Bonds.<br /><br />aus den Anträgen in New York, Judge Griesa vom 9.11.2012</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-9065886364199653010.post-352220917893761782012-11-09T14:32:00.002-08:002012-11-09T14:32:51.763-08:00beglaubigte Übersetzung des Berufungsurteils vom 26.10.2012 liegt mir jetzt vor<br />
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<span style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.35pt; mso-ansi-language: DE;">12-105(L) </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;"><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.1pt; mso-ansi-language: DE;">NML Capital, Ltd. gegen die Republik Argentinien </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;"><o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.3pt; mso-ansi-language: DE;">BERUFUNGSGERICHT DER VEREINIGTEN STAATEN</span></b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;"><o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.25pt; mso-ansi-language: DE;">FÜR
DEN ZWEITEN GERICHTSBEZIRK</span></b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;"><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.25pt; mso-ansi-language: DE;">_____________________</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;"><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;">Amtszeit <span style="letter-spacing: -.25pt;">August 2011</span><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; mso-ansi-language: DE;">(Vorgebracht: 23. Juli 2012 </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;"> <span style="letter-spacing: -.2pt;">Beschlossen: 26. Oktober 2012) <o:p></o:p></span></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.15pt;">Aktenzeichen 12-105(L), 12-109(CON), 12-111(CON), 12-157(CON),
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.1pt;">12-163(CON), 12-164 (CON), 12-170(CON), 12-176 (CON), 12-185 (CON),
12-189 (CON), 12-214 (CON), 12-909 (CON), 12-914 (CON), 12-916 (CON), 12-919
(CON), 12-920 (CON), 12-923 (CON), 12-924 (CON), 12-926 (CON), 12-939 (CON),
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">12-968 (CON), 12-971 (CON)</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt;"><o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">NML C</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">APITAL</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, L</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">TD</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">., A</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">URELIUS</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> C</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">APITAL</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> M</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ASTER</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, L</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">TD</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">., ACP M</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ASTER</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, L</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">TD</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">., B</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">LUE</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> A</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">NGEL</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt;"><o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">B</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">URGUENO</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, M</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">IRTA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> S</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">USANA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> D</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">IEGUEZ</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, M</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ARIA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> E</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">VANGELINA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> C</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ARBALLO</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, L</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">EANDRO</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> D</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ANIEL</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt;"><o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">P</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">OMILIO</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, S</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">USANA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> A</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">QUERRETA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, M</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ARIA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> E</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">LENA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> C</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ORRAL</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, T</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ERESA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> M</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">UNOZ</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> D</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">E</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> C</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ORRAL</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, N</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ORMA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt;"><o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">E</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">LSA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> L</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">AVORATO</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, C</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ARMEN</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> I</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">RMA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> L</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">AVORATO</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, C</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ESAR</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> R</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">UBEN</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> V</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">AZQUEZ</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">, N</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">ORMA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> H</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">AYDEE</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;"> G</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt;">INES</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt;">,</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt;"><o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.25pt;">M</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.25pt;">ARTA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.25pt;"> A</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.25pt;">ZUCENA</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.25pt;"> V</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.25pt;">AZQUEZ</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.25pt;">, O</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.25pt;">LIFANT</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.25pt;"> F</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.25pt;">UND</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.25pt;">, L</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.25pt;">TD</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.25pt;">.,</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt;"><o:p></o:p></span></div>
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<i><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; mso-ansi-language: DE;">Kläger-Berufungsbeklagte</span></i><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; mso-ansi-language: DE;">, </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;"><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -1.35pt; mso-ansi-language: DE;">gegen</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;"><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; font-variant: small-caps; letter-spacing: -.25pt; mso-ansi-language: DE;">Die
Republik Argentinien,</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; font-variant: small-caps; mso-ansi-language: DE;"><o:p></o:p></span></div>
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<i><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; mso-ansi-language: DE;">Beklagter-Berufungskläger</span></i><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; mso-ansi-language: DE;">. </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;"><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; mso-ansi-language: DE;">Vor: P</span><span style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt; mso-ansi-language: DE;">OOLER</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; mso-ansi-language: DE;">, B.D. P</span><span style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt; mso-ansi-language: DE;">ARKER</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; mso-ansi-language: DE;"> und R</span><span style="font-family: "Times New Roman","serif"; font-size: 9.5pt; letter-spacing: -.2pt; mso-ansi-language: DE;">AGGI</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; mso-ansi-language: DE;">,<i> Bezirksrichter</i>. </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: DE;"><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.1pt; mso-ansi-language: DE;">Die Kläger berufen sich auf die
dauerhaften gerichtlichen Verfügungen, erlassen vom Bezirksgericht der
Vereinigten Staaten für den südlichen Bezirk von New York (Griesa, J.) zur Abhilfe
gegen den Wortbruch seitens der Republik Argentinien, die Anleihegläubiger nach
ihrem Staatsbankrott im Jahr 2001 zu bezahlen. Wir sind der Meinung, dass die
Republik Argentinien ihr Versprechen gebrochen hat und bestätigen
dementsprechend die zugrunde liegenden Urteile des Bezirksgerichts. Des Weiteren
sehen wir keinen Ermessensmissbrauch im Unterlassungsanspruch, der vom
Bezirksgericht erlassen wurde. Jedoch in Anbetracht der fehlenden Klarheit
darüber, wie die Verfügungen funktionieren sollen, wird der Fall an das
Bezirksgericht zurückverwiesen zum Vorgehen, das notwendig ist, um diese Themen
zu klären.<o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; line-height: 115%; mso-ansi-language: DE; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Teilweise BESTÄTIGT </span></b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; letter-spacing: -.2pt; line-height: 115%; mso-ansi-language: DE; mso-bidi-font-weight: bold; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">und<b> teilweise AN DIE UNTERE INSTANZ ZURÜCKVERWIESEN.</b></span>Unknownnoreply@blogger.com0