Tag: NML Capital v. Bank of Argentina

Second Circuit Orders Argentina to Submit a Payment Proposal

The following post comes to us from Antonia Stolper, head of the Capital Markets-Americas group and the Latin America affinity group at Shearman & Sterling LLP, and is based on a Shearman & Sterling client publication by Ms. Stolper, Henry Weisburg, Stephen J. Marzen, and Patrick Clancy.

The Second Circuit has ordered Argentina to submit a payment proposal, following oral argument in the NML v. Argentina appeal.

As we reported in a February 28 note, the three-judge panel of the Second Circuit expressed interest in whether an alternative Ratable Payment formula might be appropriate – one that would provide for equitable payments to the plaintiffs over time but would not amount to a 100% one time payment. At the oral argument, payment proposals made by counsel for both Argentina and the Exchange Bondholders were vague. Following up on those proposals, the panel ordered Argentina’s counsel to state “in writing” “the precise terms” of any “alternative payment formula and schedule to which it is prepared to commit.” The March 1, 2013 order provides in full as follows:


Don’t Cry for Argentine Bondholders

The following post comes to us from Antonia E. Stolper, head of the Capital Markets-Americas group and the Latin America affinity group at Shearman & Sterling LLP, and is based on a Shearman & Sterling client publication by Ms. Stolper, Henry Weisburg, Stephen J. Marzen, and Patrick Clancy.

An update on the final round of appellate filings in the NML v. Argentina appeal.

On January 25, briefs were filed with the Second Circuit on behalf of two groups of plaintiff-appellees in the appeal from District Court Judge Griesa’s November 21 injunction, NML and Aurelius. And on February 1, four sets of reply briefs were filed, on behalf of appellants Argentina, Bank of New York Mellon (BNY Mellon), the Exchange Bondholders Group, and Fintech Advisory. Under the schedule set by the Second Circuit, briefing is now concluded, and the next major event will be oral argument before the Second Circuit on February 27.

Copies of all of these papers can be found on our Argentine Sovereign Debt webpage, at http://www.shearman.com/argentine-sovereign-debt/. Our summary of the prior briefing on this appeal can also be found there.

We summarize below the major points made in each of these six briefs, followed by our compilation of the major issues cutting across the virtual mountain of briefing confronting the three-judge panel that will decide this case.


Court Rules Argentine Central Bank Reserves Immune

H. Rodgin Cohen is a partner and senior chairman of Sullivan & Cromwell LLP focusing on acquisition, corporate governance, regulatory and securities law matters. This post is based on a Sullivan & Cromwell LLP publication by Sergio J. Galvis and Joseph E. Neuhaus. Sullivan & Cromwell represented the Central Bank of Argentina in the case which is discussed below.

In an important sovereign immunity decision, the United States Court of Appeals for the Second Circuit recently ruled that the immunity provided to central bank assets in the Foreign Sovereign Immunities Act (the “FSIA”) does not depend on whether the central bank is “independent” from the parent state. Rather, ruling on an issue of first impression, the Court held that the immunity depends only on whether the assets are used for “central banking functions.” The Court therefore vacated attachments that bondholders of the Republic of Argentina had obtained on approximately $100 million of reserves of the Central Bank of Argentina (known by its initials in Spanish as “BCRA”) held at the Federal Reserve Bank of New York (the “FRBNY”). NML Capital, Ltd. v. Banco Central de la República Argentina, No. 10-1487- cv(L), — F.3d —, 2011 WL 2611269, at *19-20 (2d Cir. July 5, 2011). Sullivan & Cromwell LLP represented BCRA in the case.


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