Opinion
04 Civ. 7504 (TPG).
August 4, 2006
OPINION
Plaintiffs are the beneficial owners of certain bond indebtedness issued by defendant 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.
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 various dates in August and September 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 plaintiffs. The following tables contain the necessary identifying information regarding each plaintiff's beneficial interests in bonds.
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).
Table 1.
Plaintiff 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: Plaintiff 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: : Josefa Ambroselli and Maria Suncion I. Castelli U.S. $ 16,000.00 CUSIP No. 040114AR1; ISIN No. US040114AR16 January 30, 1997. January 30, 2017. 11.375 % Between August and September 2001. Notice sent September 15, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account summary from Caja de Valores dated March 31, 2002. (Account Statements; Letters; Notarized Statements, etc.) : Josefa Ambroselli and Maria Suncion I. Castelli U.S. $ 29,216.00 CUSIP No. 040114GF1; ISIN No. US040114GF14 December 19, 2001. December 19, 2008. 7% Between August and September 2001 and on June 14, 2004. Notice sent September 15, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account summaries from Caja de Valores dated March 31, 2002 and June 30, 2004. (Account Statements; Letters; Notarized Statements, etc.)Table 3.
Plaintiff 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: Alcira Noemi Arditi and Claudio Gabriel Arditi U.S. $ 43,000.00 CUSIP No. 040114GG9; ISIN No. US040114GG96 June 19, 2001. June 19, 2018. 12.25% Between June and July 2004. Notice sent September 13, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statements from Smith Barney — Citigroup dated April 30, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 4.
Plaintiff Beneficial Owner: Enrique AugspachFace Value: U.S. $ 110,000.00
CUSIP No., ISIN No., BB CUSIP No. 040114ANO; ISIN No. US040114AN02No.:Date Of Issuance: September 10, 1996.
Date Of Maturity: September 10, 2006.
Interest Rate/Payable: 11%
Date Of Purchase: November 1998.
Acceleration: Notice sent September 13, 2004.
Contract Documents: FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.)
Evidence of Ownership — Account statements from Smith Barney —Proffered: Citigroup dated May 31, 2005. (Account Statements; Letters; Notarized Statements, etc.)
Table 5.
Plaintiff 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: Mercedes Calvo and Manuel Calvo U.S. $ 203,000.00 CUSIP No. 040114ANO; ISIN No. US040114AN02 September 10, 1996. September 10, 2006. 11% Between August 1999 and October 2001 Notice sent August 31, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Certification from Caja de Valores dated June 7, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 6.
Plaintiff Beneficial Owner: Alberto CompareFace Value: U.S. $ 30,000.00
CUSIP No., ISIN No., BB CUSIP No. 040114GD6; ISIN No. US040114GD65No.:Date Of Issuance: None given.
Date Of Maturity: February 21, 2012
Interest Rate/Payable: 12.375%
Date Of Purchase: On or about July 5, 2004.
Acceleration: Notice sent September 13, 2004.
Contract Documents: FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.)
Evidence of Ownership — Account statement from PKB Privatbank AGProffered: dated June 6, 2005. (Account Statements; Letters; Notarized Statements, etc.)
Table 7.
Plaintiff Beneficial Owner: Sandro ConcettiniFace Value: U.S. $ 20,000.00
CUSIP No., ISIN No., BB CUSIP No. 040114GD6; ISIN No. US040114GD65No.:Date Of Issuance: None given.
Date Of Maturity: February 21, 2012
Interest Rate/Payable: 12.375%
Date Of Purchase: On or about July 5, 2004.
Acceleration: Notice sent September 13, 2004.
Contract Documents: FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.)
Evidence of Ownership — Account statement from Carisbo San PaoloProffered: dated April 30, 2005. (Account Statements; Letters; Notarized Statements, etc.)
Table 8.
Plaintiff 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: : Giovenna Conenna, Antonella de Rosa Kunderfranco and Manuela de Rosa Kunderfranco U.S. $ 25,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375% On or about July 9, 2004. Notice sent September 13, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Credito Emiliano-Credem dated June 14, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 9.
Plaintiff 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: : Augusto Arcangeli de Felicis U.S. $ 1,110,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375% On or about February 17, 2004. Notice sent September 13, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Cassa di Risparmio di Foligno Spa dated December 30, 2005; account (Account Statements; statement from Banca Euromobiliare dated Letters; Notarized December 30, 2005. Statements, etc.)Table 10.
Plaintiff 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: : Adriana Dell'era U.S. $ 75,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375% On or about June 15, 2004. Notice sent September 13, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Credito Valtellinese dated December 31, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 11.
Plaintiff 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: : Alicia Geller de Sondermann, Eva Sondermann, Susana Sondermann, and Ricardo Sondermann EURO 70,000 ISIN No. XS0086333472 April 21, 1998. April 21, 2008 8.125 % On or about May 2001. Notice sent September 15, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Wachovia Securities dated July 31, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 12.
Plaintiff 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: : Fernando Barbeito Fernandez U.S. $ 12,000.00 CUSIP No. 040114ANO; ISIN No. US040114AN02 September 10, 1996. September 10, 2006. 11% On or about December 6, 1996. Notice sent September 13, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Certification from Caja de Valores dated June 9, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 13.
Plaintiff 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: : Fernando Barbeito Fernandez U.S. $ 1,000.00 CUSIP No. 040114AH3; ISIN No. US040114AH34 December 20, 1993. December 20, 2003. 8.375 % On or about December 6, 1996. Notice sent September 13, 2004. FAA dated December 10, 1993. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Certification from Caja de Valores dated June 9, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 14.
Plaintiff 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: : Giancarlo Ganapini and Laura Anna Capurro U.S. $ 30,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375 % On or about July 9, 2004. Notice sent September 13, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Credito Emiliano-Credem dated June 14, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 15.
Plaintiff 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: Fernanda Angela Lovero and Sabrina Parodi U.S. $ 25,000.00 CUSIP No. 040114GD6; ISIN No. US040114GD65 None given. February 21, 2012 12.375 % On or about July 9, 2004. Notice sent September 13, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Credito Emiliano-Credem dated June 14, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 16.
Plaintiff 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: Roberto Carlos Parada, Rosa Sara Pompeya Lando de Parada, Guillermo Pedro Parada, and Mariano Roberto Parada U.S. $ 560,000.00 CUSIP No. 040114AR1; ISIN No. US040114AR16 January 30, 1997. January 30, 2017 11.375 % Between March and May 2001 Notice sent September 15, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Merrill Lynch dated May 31, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 17.
Plaintiff 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: Roberto Carlos Parada, Rosa Sara Pompeya Lando de Parada, Guillermo Pedro Parada, and Mariano Roberto Parada U.S. $ 142,000.00 CUSIP No. 040114GH7; ISIN No. US040114GH79 None given. June 19, 2031. 12% On or about January 14, 2002. Notice sent September 15, 2004 FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Merrill Lynch dated May 31, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 18.
Plaintiff 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: Licia Sampfli Rosa U.S. $ 30,000.00 CUSIP No. 040114GD6; ISIN No. USO40114GD65 None given. February 21, 2012 12.375 % On or about June 8, 2004. Notice sent September 13, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from PKB Privatbank AG dated June 13, 2005. (Account Statements; Letters; Notarized Statements, etc.)Table 19.
Plaintiff 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: Paolo Rosa U.S. $ 4,000.00 CUSIP No. 040114GD6; ISIN No. USO40114GD65 None given. February 21, 2012 12.375% On or about July 8, 2004. Notice sent September 13, 2004. FAA dated October 19, 1994. (FAA; FRB; Indenture; Offering Prospectus; Certificates, etc.) — Account statement from Credito Valtellinese dated December 31, 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 they owned the beneficial interests as of various dates in 2005. There is no evidence of any change of ownership thereafter.
CONCLUSION
Plaintiffs' motions for summary judgment is 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 parties are unable to reach agreement on those subjects, plaintiffs shall submit a proposed judgment to the court, and the Republic shall submit any objections to plaintiffs' proposed judgment within five business days thereafter. The court will then resolve any remaining disagreements.
SO ORDERED.