Rigueiro v. the Republic of Argentina

Full title: MARCELO RUBEN RIGUEIRO, et al., Plaintiffs, v. THE REPUBLIC OF ARGENTINA…

Court: United States District Court, S.D. New York

Date published: Aug 22, 2006

05 Civ. 3089 (TPG) (S.D.N.Y. Aug. 22, 2006)

Opinion

05 Civ. 3089 (TPG).

August 22, 2006

OPINION

THOMAS GRIESA, Senior District Judge

Plaintiffs are the beneficial owners of certain bond indebtedness issued by defendants The Republic of Argentina. The Republic defaulted on such indebtedness in December 2001 during a profound fiscal crisis. Plaintiffs are suing to recover amounts due to them as a result of the default and have moved for summary judgment. Plaintiffs also move to strike the Republic's discovery requests.

The motions are granted.

FACTS

The bond indebtedness at issue is governed by Fiscal Agency Agreements dated December 10, 1993 (the "1993 FAA") and 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 Corporation 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 and Section 20 of the 1993 FAA state 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. Both FAAs provide 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 1994 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. . . .

The 1993 FAA contains similar language.

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 March 17, 2005, plaintiffs sent notices to Bankers Trust Company, the Fiscal Agent of The Republic of Argentina, declaring the principal amounts of the debt securities held by plaintiffs to be immediately due and payable.

The bonds that are the subject of this action are listed hereafter. Also listed are the amounts of the beneficial interests owned by each plaintiff.¹

1 The court notes the distinction between bonds and beneficial interests. In some previous opinions, the court has simply referred to the plaintiffs as owners of "bonds," when in fact plaintiffs are technically owners of "beneficial interests in bonds." The Republic actually issues "a bond" to a depository. The depository, in some form, issues "participations" to brokers, who sell "beneficial interests" to purchasers. These beneficial interests are identified by reference to the underlying bond (CUSIP or ISIN number or both; date of issuance and maturity; rate of interest) and the principal amount of the beneficial interest. This distinction is discussed more fully in Million Air Corp. v. Republic of Argentina, No. 04 Civ. 1048, 2005 U.S. Dist. LEXIS 23904 (S.D.N.Y. Oct. 17, 2005).

The following tables contain the necessary identifying information regarding each plaintiff's beneficial interests in bonds.

Table 1.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Michele Colella and Denise Marie Laurette : Dussault in Colella U.S. $ 1,300,000.00 CUSIP No. 040114AN0; ISIN No. US040114AN02 September 10, 1996. September 10, 2006. 11 % On or about May 24, 2004. Notice sent March 17, 2005. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Banca Carige dated December 31, 2005. (Account Statements; Letters; Notarized Statements, etc.)

Table 2.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Angelo Cottoni and Bruna Mattioli : U.S. $ 360,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375 % On or about January 24, 2005. Notice sent March 17, 2005. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account confirmation from UniCredit Private Banking S.p.A. dated January 12, 2006. (Account Statements; Letters; Notarized Statements, etc.)

Table 3.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Nestor De Nicola, Graciela Marta Berretti and : Paula De Nicola U.S. $ 67,000.00 CUSIP No. 040114BE9; ISIN No. US040114BE93 April 7, 1999. April 7, 2009 11.75 % On or about August 17, 2000 and April 25, 2001 Notice sent March 17, 2005. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Merrill Lynch dated December 30, 2005. (Account Statements; Letters; Notarized Statements, etc.)

Table 4.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Luis Angel Gatti, Susana Leonor Gatti and Marta : Beatriz Gatti U.S. $ 333,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375 % Between June 30, 2001 and December 31, 2001. Notice sent March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Confirmation from Caja de Valores dated January 20, 2006. (Account Statements; Letters; Notarized Statements, etc.)

Table 5.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Alessandra Regoli : U.S. $ 800,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375 % On or about January 25, 2005. Notice sent March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Banco di Brescia dated January 12, 2006. (Account Statements; Letters; Notarized Statements, etc.)

Table 6.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Silvia Regoli : U.S. $ 1,000,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375 % On or about January 25, 2005. Notice sent March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Banco di Brescia dated January 12, 2006. (Account Statements; Letters; Notarized Statements, etc.)

Table 7.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Marcelo Ruben Rigueiro and Silvia Mabel Saccone : U.S. $ 34,000.00 CUSIP No. 040114AV2; ISIN No. US040114AV28 September 19, 1997. September 19, 2027 9.75 % On or about August 8, 2001. Notice sent March 17, 2005. FAA dated December 10, 1993. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Banque R. Supervielle et Fils S.A. dated January 30, 2006. (Account Statements; Letters; Notarized Statements, etc.)

Table 8.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Enrique Jorge Rocca, Ana Maria Saldaña and : Santiago Rocca U.S. $ 11,000.00 CUSIP No. 040114BE9; ISIN No. US040114BE93 April 7, 1999. April 7, 2009 11.75 % On or about May 18, 2000 and August 29, 2000. Notice sent March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Marrill Lynch dated December 30, 2005. (Account Statements; Letters; Notarized Statements, etc.)

Table 9.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Enrique Jorge Rocca, Ana Maria Saldaña and : Santiago Rocca U.S. $ 35,000.00 CUSIP No. 040114GA2; ISIN No. US040114GA27 None given. June 15, 2015 11.75 % On or about May 18, 2000 and August 29, 2000. Notice sent March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Marrill Lynch dated December 30, 2005. (Account Statements; Letters; Notarized Statements, etc.)

Table 10.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Enrique Jorge Rocca, Ana Maria Saldana and : Santiago Rocca U.S. $ 18,000.00 CUSIP No. 040114AH3; ISIN No. US040114AH34 December 20, 1993. December 20, 2003. 8.375 % On or about May 16, 2001. Notice sent March 17, 2005. FAA dated December 10, 1993. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Marrill Lynch dated December 30, 2005. (Account Statements; Letters; Notarized Statements, etc.)

Table 11.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Ines Rota : U.S. $2,530,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375 % Between January 25, 2005 and February 3, 2005. Notice sent March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statements from Banca Monte dei Paschi di Siena S.p.A. and Banco di Brescia, dated (Account Statements; January 11, 2006 and January 12, 2006, Letters; Notarized respectively. Statements, etc.)

Table 12.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Ines Rota : U.S. $ 342,000.00 CUSIP No. 040114AZ3; ISIN No. US040114AZ32 December 4, 1998. December 4, 2005. 11% Between February 23, 2001 and December 6, 2001. Notice sent March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Banco di Brescia dated January 12, 2006. (Account Statements; Letters; Notarized Statements, etc.)

Table 13.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Ambrogio Stucchi, Giuseppe Stucchi and Maria : Luisa Stucchi U.S. $ 25,200.00 CUSIP No. 040114BE9; ISIN No. US040114BE93 April 7, 1999. April 7, 2009. 11.75 % Between May 28, 1999, October 15, 1999, April 14, 2000 and October 24, 2000. Notice sent on March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Credito Plantense S.A. dated January 10, 2006. (Account Statements; Letters; Notarized Statements, etc.)

Table 14.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Ambrogio Stucchi, Giuseppe Stucchi and Maria : Luisa Stucchi U.S. $ 24,000.00 CUSIP NO. 040114AN0; ISIN No. US040114AN02 September 10, 1996. September 10, 2006. 11 % On or about May 26, 2003. Notice sent on March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Credito Plantense S.A. dated January 10, 2006. (Account Statements; Letters; Notarized Statements, etc.)

Table 15.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Vito Zancaner : U.S. $ 150,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375 % On or about February 16, 2005. Notice sent on March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Banca Nazionale del Lavoro S.p.A. dated December 31, 2005. (Account Statements; Letters; Notarized Statements, etc.)

Table 16.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Matteo Zanichelli and Giovanni Zanichelli : U.S. $ 415,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375 % On or about January 26, 2005. Notice sent on March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Banco di Brescia dated January 16, 2006. (Account Statements; Letters; Notarized Statements, etc.)

Table 17.

Plaintiff Bond Holder or Beneficial Owner Face Value: CUSIP No., ISIN No., BB No.: Date Of Issuance: Date Of Maturity: Interest Rate/Payable: Date Of Purchase: Acceleration: Contract Documents: Evidence of Ownership Proffered: Alfredo Enrique Zucchini : U.S. $ 430,000.00 CUSIP No. 040114GF1; ISIN No. US040114GF14 December 19, 2001. December 19, 2008 7 % On or about November 30, 2001. Notice sent on March 17, 2005. FAA dated October 19, 1994. (FAA; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Santander Private Banking dated December 30, 2005. (Account Statements; Letters; Notarized Statements, etc.)

DISCUSSION

This Court has already granted summary judgment in other cases to plaintiffs seeking to collect on the Republic's defaulted bonds issued under the FAAs. See Mazzini v. Republic of Argentina, No. 03 Civ. 8120, 2005 U.S. Dist. LEXIS 5692 (S.D.N.Y. Mar. 31, 2005). Only certain specific issues need to be discussed in connection with the present motion.

Standing and Proof of Ownership

In the two opinions in Fontana v. Republic of Argentina, 415 F.3d 238 (2d Cir. 2005), and Applestein v. Province of Buenos Aires, 415 F.3d 242 (2d Cir. 2005), the Second Circuit has held that an owner of a beneficial interest, such as plaintiffs here, must receive authorization from the registered holder of the bond before it may sue, but that such authorization may be granted subsequent to the filing of a lawsuit. Alternatively, the Republic may waive the authorization requirement.

The Republic has agreed to waive objections based on lack of authorization where the court makes a finding of current ownership. See Transcript, March 28, 2006, Cilli v. Republic of Argentina (04 Civ. 6594).

Here, plaintiffs have adequately demonstrated through their account statements that owned the beneficial interests as of various dates in December 2005 and January 2006. There is no evidence of any change of ownership thereafter.

CONCLUSION

The motion to strike defendants' discovery requests is granted.

The motions for summary judgment are granted. Judgment will be entered for the principal amount of the bonds plus accrued interest.

The parties shall consult with one another concerning the form of the judgment and the amounts of interest that should be awarded in the judgment. If the parties are able to reach agreement on those subjects, they shall jointly submit an agreed proposed judgment to the court. If the Republic and any plaintiff are unable to reach agreement on those subjects, that plaintiff shall submit a proposed judgment to the court, and the Republic shall submit any objections to that plaintiff's proposed judgment within five business days thereafter. The court will then resolve any remaining disagreements.

SO ORDERED.