The opinion of the court was delivered by: THOMAS GRIESA, Senior District Judge
Plaintiff's Hernan Lopez Fontana and Mariana Mori de Lopez have
acquired certain bonds issued by the defendant, The Republic of Argentina
("The Republic"). The Republic has defaulted on the bonds. Plaintiff's
are suing to recover amounts due to them by virtue of the default and
have moved for summary judgment.
The Republic opposes the motion asserting various defenses. In addition
the Republic moves to dismiss for failure to state a claim.
Plaintiff's' motion for summary judgment on their bond obligations is
granted. The Republic's motion is denied. Facts
Plaintiff's are citizens of the Republic of Argentina and resident in
the City of Ushuaia, Tierra del Fuego Province, Republic of Argentina.
They have acquired certain bonds issued by The Republic of Argentina with
principal amounts, as follows:
(1) $300,000 in face value in bonds due in April 7, 2009, identified by
ISIN US040114BE93 and Common Code 9639713;
(2) $160,000 in face value in bonds due January 30, 2017, identified by
ISIN US040114AR16 and Common Code 7321473, bearing an interest rate of 11
3/8% to be paid semi-annually on January 30 and June 30.
As proof of ownership plaintiffs have provided:
(1) an affidavit stating that they purchased the bonds listed above in
the aggregate principal value of $460,000. Plaintiff's state that the
2009 Bond pays interest at a rate of 11.375% semi-annually on October 7
and April 7. Plaintiff's further state that the bonds were purchased
from, and are held in the name of, Merrill Lynch PFS/SEGREGATE, N.Y.
("Merrill Lynch"), which has allocated them on its books to plaintiffs;
(2) a December 2003 account statement of plaintiffs' brokerage account with Merrill Lynch, listing the above listed bonds, in the
above listed amounts and stating that the bonds were purchased on
November 18, 2002 (for the 2009 Bond) and July 6, 2001 (for the 2017
Bond), respectively. The brokerage statement, however, contradicts the
affidavit, assigning the 2009 Bond an interest rate of 11 3/4%;
(3) a copy of a notarized letter sent to plaintiffs by Merrill Lynch,
confirming that plaintiffs are the beneficial owners of the above listed
bonds, in the above given amounts, which are held in plaintiffs' account
with Merrill Lynch. The letter states that Merrill Lynch holds the bonds
with Euroclear Bank S.A./N.V. for plaintiffs;
(4) notarized statements from the depositary or nominee Euroclear,
stating that the above listed bonds, in the above stated amounts, are
being held on account for Merrill Lynch in Euroclear Securities Clearance
Account 93999, and that the bonds are blocked for the purpose of filing a
claim. The statements also indicate, but do not verify, that Merrill