United States District Court, S.D. New York
March 12, 2004.
MACROTECNIC INTERNATIONAL CORPORATION, Plaintiff, -against- THE REPUBLIC OF ARGENTINA, Defendant LATINBURG S.A., Plaintiff, -against- THE RFPITRI 1C OF ARGENTINA, Defendant HERNAN LOPEZ FONTANA and MARIA A MORI DE LOPEZ, Plaintiffs, -against- THE REPUBLIC OF ARGENTINA, Defendant MILLION AIR CORP., Plaintiff, -against- THE REPUBLIC OF ARGENTINA, Defendant DENCHU INVESTMENT CORP., Plaintiff, -against- THE REPUBLIC OF ARGENTINA, Defendant GUILLERMO FRANCO et al., Plaintiffs, -against- THE REPUBLIC OF ARGENTINA, Defendant
The opinion of the court was delivered by: THOMAS GRIESA, Senior District Judge
WHEREAS plaintiff Macrotecnic International Corporation ("Macrotecnic")
has a judgment against the Republic of Argentina; and
WHEREAS on February 12, 2004, Macrotecnic moved for an ex parte writ of
execution against bank accounts in the name of Correo Argentine, S.A.
("Correo") maintained in the New York branches of Lehman Brothers and BNP
Paribas (the "Banks"); and
WHEREAS on February 13, 2004 the Court issued an order permitting
Macrotecnic to serve restraining notices pursuant to CPLR § 5 222
against Correo's accounts at the Banks (the "Accounts"), and directing
the Republic to show cause why a writ of execution should not be granted;
WHEREAS on February 17, 2004 plaintiffs Latinburg, S.A., Denchu
Investment Corporation, Guillermo Franco, Rafael Franco, and Luisa
Franco, and Panamel S.A., Hernan Lopez Fontana and Mariana Mori de Lopez,
and Million Air Corp. (the "pre-judgment plaintiffs"), moved for a
temporary restraining order and order of pre-judgment attachment against
the Accounts; and,
WHEREAS on February 17, 2004 the Court issued a temporary restraining
order permitting the pre-judgment plaintiffs to restrain the Accounts and
directing the Republic to show cause why an Order of Attachment should
not be issued; and,
WHEREAS a court hearing was held on February 17, 2004 concerning all of
plaintiffs' restraints on the Accounts (the "Restraining Notices") at
which the Court ordered (i) the temporary extension of the Restraining
Notices and (ii) that plaintiffs file an expedited motion to confirm the
Restraining Notices; and,
WHEREAS on February 19, 2004, plaintiffs filed a motion to confirm the
Restraining Notices; and,
WHEREAS on February 24, 2004, upon motion by plaintiffs, the Court
issued an order (i) authorizing service upon Correo and the Trustee in
the insolvency proceedings of Correo in Argentina (the "Trustee"), so
that either or both of them may appear and state their position with
respect to the Accounts, (ii) continuing the February 17, 2004 temporary
restraining order with respect to the Lehman account; and (iii) scheduling
a hearing on March 5, 2004;and,
WHEREAS on March 3, 2004 the Republic filed a brief in opposition to
the motion to confirm the Restraining Notices; and,
WHEREAS on March 3, 2004 Correo and the Trustee filed the declaration
of Julio C. Rivera, legal advisor to the Trustee; and,
WHEREAS a hearing was held on March 5, 2004 at which the Court heard
oral argument from counsel for the parties and for Correo and the Trustee
on plaintiffs' motion to confirm the Restraining Notices: and,
WHEREAS following the March 5, 2004 hearing the parties made further
WHEREAS based on the submissions of the parties and by Correo and the
Trustee, this Court finds that plaintiffs have not met their burden of
establishing that the Republic has an attachable interest in the
IT IS HEREBY ORDERED that.
1. Plaintiffs' motion to confirm the Restraining Notices is denied.
2. The Restraining Notices and temporary restraining orders are
3. Plaintiffs' motions for Writ of Execution and for Pre-judgment
Attachment of the Accounts are denied.
DECLARATION OF LEONARDO MADCUR
Pursuant to 28 U.S.C. § 1746 Leonardo Madcur declares as follows:
1. I am the Secretary of Technical Coordination of the Ministry of
Economy and Production of the Republic of Argentina (the "Republic"). I
am authorized to make this declaration on behalf of the Republic.
2. The Republic declares that it does not own and has no property
interest in the accounts of Correo Argentine S.A. ("Correo") located at
the New York branches of Lehman Brothers and BNP Paribas (the
3. The Republic has not, by Executive Decree 1075/03, terminating its
Concession Agreement with Correo, or otherwise, asserted ownership of or
any interest in the Accounts. The Republic has no right under the
Concession Agreement of August 26, 1997
between the Republic and Correo to take ownership or possession of
the Accounts, cannot do so and does not intend to attempt to do so.
4. The Republic has no power to direct the disposition of the funds in
the Accounts. Under Argentine law, the only body with authority over the
Accounts is the Juzgado National de Primera Instancia en lo Comercial
No. 9 (National Commercial Court in the First Instance No. 9 or the
"Argentine Court"), which must administer those funds in accordance with
the Argentine Ley de Concursos y Quiebras (the Argentine Insolvency and
Bankruptcy Law or the "Insolvency Law"). Under the Insolvency Law, the
Republic has no right to the property of Correo, and is simply one of
Correo's hundreds of unsecured general creditors.
5. On December 16, 2003, the Argentine Court decreed the bankruptcy of
Correo. This decision has been stayed pending appeal. As a precautionary
measure, on 22, 2003, the Argentine Court ordered that the Accounts be
6. If the Argentine Court's December 16, 2003 decision that Correo be
placed into bankruptcy were reversed on appeal, Correo would remain in
insolvency proceedings (the concurso). The Accounts would continue to be
administered under the supervision of the Argentine Court and the Trustee
in the concurso. Under these circumstances, the Republic would continue
to have no right to or power over the Accounts.
7. If the Argentine Court's December 16, 2003 Bankruptcy Decree were
affirmed on appeal, then Correo would go into liquidation. The Accounts
would become part of Correo's bankruptcy estate, which would be
administered by the Argentine Court and the Trustee. In this situation,
the Republic would still have no right to or control over the Accounts.
I declare under penalty of perjury under the laws of the United States
of America that the foregoing is true and correct.
Executed on in Buenos Aires, Argentina.
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