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Nml Capital, Ltd v. the Republic of Argentina

September 28, 2011

NML CAPITAL, LTD., PLAINTIFF,
v.
THE REPUBLIC OF ARGENTINA, DEFENDANT.



OPINION

Plaintiff, NML Capital, Ltd., ("NML"), is the beneficial owner of certain bond indebtedness issued by defendant, the Republic of Argentina (the "Republic"), on which the Republic defaulted in December 2001. Plaintiff now moves for partial summary judgment for principal and interest due on the bonds. The Republic responds that plaintiff "has improperly redacted purchase price information from most of the proof offered in support of the motion," and therefore "the Republic reserves its rights and preserves for appeal all objections to the deficiencies" in this proof.

The motion for partial summary judgment is granted.

Background

The bond indebtedness at issue is governed by a Fiscal Agency Agreement dated October 19, 1994 (the "1994 FAA"). The 1994 FAA is the same agreement that governed the bond indebtedness on which this court granted summary judgment to the plaintiffs in Lightwater Corp. Ltd. v. Republic of Argentina, No. 02 Civ. 3804, 2003 WL 1878420 (S.D.N.Y. Apr. 14, 2003).

Section 22 of the 1994 FAA states that the Republic waives sovereign immunity and consents to jurisdiction in any state or federal court in the borough of Manhattan in the City of New York. The 1994 FAA also provides that the Republic's obligations on the bonds are unconditional and that failure to make any payment of principal or interest for 30 days after the applicable payment date constitutes an event of default. A declaration by the Republic of a moratorium on the payment of principal or interest on its public external indebtedness is an event of default as well. Paragraph 12 of the FAA provides for acceleration of principal if there is a failure to pay interest or a moratorium. If either of these events occurs, "each holder of Securities and such Series may by such notice in writing declare the principal amount of Securities of such Series held by it to be due and payable immediately."

On December 24, 2001, the Republic 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, 2003 WL 1878420, at *2; Applestein v. Republic of Argentina, No. 02 Civ. 1773, 2003 WL 1990206, at *1 (S.D.N.Y. Apr. 29, 2003).

On August 1, 2008, plaintiff sent a notice to Bankers Trust Company, the Fiscal Agent of the Republic, declaring the principal amounts of the debt securities held by plaintiff in Case No. 08 Civ. 6978 to be immediately due and payable.

On February 4, 2009, plaintiff sent a notice to Bankers Trust Company declaring the principal amounts of bonds with CUSIP Nos. 040114BE9, 040114FC9, 040114GD6, 040114AR1, 040114FB1, 040114AV2, and 040114GG9, held by plaintiff in Case No. 09 Civ. 1708 to be immediately due and payable.

The Floating Rate Accrual Notes in Case. No. 09 Civ. 1707 matured on April 10, 2005, at which time the entire principal amount and all accrued and unpaid interest thereon became due and payable. The bonds with CUSIP No. 040114AN0 in Case No. 09 Civ. 1708 matured on October 9, 2006, at which time the entire principal amount and all accrued and unpaid interest therein became due and payable.

The bonds that are the subject of these actions, and the amounts of the beneficial interests owned by plaintiff, are listed in the following tables.*fn1

Plaintiff Bond Holder or Beneficial NML Capital, Ltd. Owner Face Value U.S. $225,000 CUSIP No. 040114AN0 Date of Issuance: October 9, 1996 Date of Maturity: October 9, 2006 Interest Rate/Payable: 11% Date of Acquisition: July 7, 2008 Acceleration: Notice sent August 1, 2008 Contract Documents: The 1994 FAA (FAA; Indenture; Offering Prospectus; Certificates, etc.)

Evidence of Ownership Proffered: JP Morgan Global Settled Holdings (Account Statements; Letters; COB Report, dated October 13, Notarized Statements, etc.) 2010. JP Morgan Consolidated Plaintiff Bond Holder or Beneficial NML Capital, Ltd. Owner Face Value U.S. $11,290,000 CUSIP No. 040114BE9 Date of Issuance: April 7, 1999 Date of Maturity: April 7, 2009 Interest Rate/Payable: 11.75% Dates of Acquisition: July 7, 8, 10, 14, and 24, 2008 Acceleration: Notice sent August 1, 2008 Contract Documents: The 1994 FAA (FAA; Indenture; Offering Prospectus; Certificates, etc.

Evidence of Ownership Proffered: JP Morgan Global Settled Holdings (Account Statements; Letters; COB Report, dated October 13, Notarized Statements, etc.) 2010. JP Morgan Consolidated Plaintiff Bond Holder or Beneficial NML Capital, Ltd. Owner Face Value U.S. $10,260,000 CUSIP No. 040114FC9 Date of Issuance: March 15, 2000 Date of Maturity: March 15, 2010 Interest Rate/Payable: 11.375% Dates of Acquisition: July 7, 2008 and July 21, 2008 Acceleration: Notice sent August 1, 2008 Contract Documents: The 1994 FAA (FAA; Indenture; Offering Prospectus; Certificates, etc.)

Evidence of Ownership Proffered: JP Morgan Global Settled Holdings (Account Statements; Letters; COB Report, dated October 13, Notarized Statements, etc.) 2010. JP Morgan Consolidated Plaintiff Bond Holder or Beneficial NML Capital, Ltd. Owner Face Value U.S. $10,500,000 CUSIP No. 040114GD6 Date of Issuance: February 21, 2001 Date of Maturity: February 21, 2012 Interest Rate/Payable: 12.375% Dates of Acquisition: July 14, 2008 and July 24, 2008 Acceleration: ...


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