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Michael Schmidt, Klaus Bohrer, Ute Kantner, and v. the Republic of Argentina

September 7, 2011

MICHAEL SCHMIDT, KLAUS BOHRER, UTE KANTNER, AND U.V.A. VADUZ, PLAINTIFFS,
v.
THE REPUBLIC OF ARGENTINA, DEFENDANT.



OPINION

Plaintiffs are the beneficial owners of certain bond indebtedness issued by defendant, the Republic of Argentina (the "Republic"), on which the Republic defaulted in December 2001. Plaintiffs are suing to recover amounts due to them as a result of the default and have simultaneously moved for leave to amend their complaint and for summary judgment. The Republic has no objection to the Plaintiffs' amendment or to the entry of summary judgment.

The motions are granted.

FACTS

The bond indebtedness at issue is governed by: (i) the Subscription Agreement dated as of February 5, 1996 (the "February Subscription Agreement"); (ii)the Subscription Agreement dated September 18, 1996 (the "September Subscription Agreement"); (iii)the Subscription Agreement dated June 12, 1996 (the "June Subscription Agreement"); (iv)the Subscription Agreement dated November 17, 1998 (the "1998 Subscription Agreement); (v) the Bond Purchase Agreement dated March 6, 1997 (the "1997 Bond Purchase Agreement"); (vi) the Subscription Agreement dated November 5, 1999 (the "1999 Subscription Agreement"); (vii) the Offering Circular dated June 20, 2000 and amended on October 6, 2000 (the "Offering Circular"); (viii) the Information Memorandum dated November 14, 1995 (the "November Memorandum") and (ix) the Supplemental Information Memorandum, dated December 12, 1995 (the "December Memorandum") (collectively, "Bond Agreements").

As recently noted by the Second Circuit and this Court, the Republic "explicitly waived its sovereign immunity to suit in United States courts" over the German Bonds. Capital Ventures Int'l v. Republic of Argentina, 552 F.3d 289');">552 F. 3d 289, 291 (2d Cir. 2009); see also Capital Ventures Int'l v. Republic of Argentina, 2010 U.S. Dist. LEXIS 32072 (S.D.N.Y. Mar. 31, 2010). Further, this Court has already found that the Court has personal jurisdiction over Argentina even in regard to the German Bonds. Capital Ventures Int'l, 2010 U.S. Dist. LEXIS 32072, at *6-8.

On December 24, 2001, Argentina declared a moratorium on payments of principal and interest on the external debt of the Republic. The Court refers to its previous opinions for a description of the circumstances of these defaults Lightwater Corp. Ltd. v. Republic of Argentina, No. 02 Civ. 3804, 2003 WL 1878420, at *2 (S.D.N.Y. Apr. 14, 2003); Applestein v. Province of Buenos Aires, No. 02 Civ. 1773, 2003 WL 1990206, at *1 (S.D.N.Y. Apr. 29, 2003). On or about August 4, 2009 and August 7, 2009, plaintiffs sent notices to various fiscal agents of the Republic of Argentina, providing notice of an event of default, demanding payment on certain bonds governed by the Bond Agreements, and declaring the principal amount of the other debt securities governed by the Bond Agreements to be immediately due and payable. Since declaring the moratorium, Argentina has further defaulted by failing to make any payment of interest or principal on any of its foreign debt, including the Bonds here at issue.

The bonds that are the subject of this action, and the amounts of beneficial interests owned by plaintiffs, are listed in the following tables.*fn1

TABLE 1

Plaintiff Bond Holder or MICHAEL SCHMIDT Beneficial Owner: Face Value: DM 20,000 ISIN: DE0001308609 Date Of Issuance: February 6, 1996 Date Of Maturity: February 6, 2003 Interest Rate/Payable: 10.25% Date Of Purchase: Before December 2001 Notice of Acceleration: August 7, 2009 Contract Documents: Subscription Agreement, dated as of February 5, 1996 (the "February Subscription Agreement") Evidence of Ownership Account Statements from LBBW Luxemburg S.A. Proffered: dated as of September 6, 2010

TABLE 2.

Plaintiff Bond Holder or KLAUS BOHRER Beneficial Owner: Face Value: DM 2,000,000 ISIN: DE0001340917 Date Of Issuance: September 19, 1996 Date Of Maturity: September 19, 2016 Interest Rate/Payable: 12% Date Of Purchase: Before December 2001 Notice of Acceleration: August 4, 2009 Contract Documents: Subscription Agreement dated as of September 18, 1996 (the "September Subscription Agreement").

Evidence of Ownership Account Statements from Credit Suisse dated as of Proffered: September 7, 2010

TABLE 3.

Plaintiff Bond Holder or UTE KANTNER Beneficial Owner: Face Value: DM 100,000 ISIN: DE0001325017 Date Of Issuance: May 20, 1996 Date Of Maturity: May 20, 2011 Interest Rate/Payable: 11.75% Date Of Purchase: Before December 2001 Notice of Acceleration: August 4, 2009 Contract Documents: ...


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