Adona LLC v. The Republic of Argentina

What the document is

The provided text is a November 2, 2021 letter from counsel for the Republic of Argentina to Judge Loretta A. Preska. It requests a discovery conference or permission to file a motion to compel. The text does not contain a judicial opinion or order and does not state how the court resolved the request.

Background

The letter describes plaintiffs as hedge funds seeking hundreds of millions of dollars based on claims that Argentina acted in bad faith by refusing to pay amounts allegedly due under GDP-linked securities issued in 2005 and 2010. The letter says those securities had otherwise paid nearly $10 billion. The text also refers to related cases, including the action identified as Adona LLC et al., No. 19 Civ. 11338.

Discovery requested

Argentina asked the plaintiffs to respond more fully to interrogatories and document requests. The requested material included:

- Information and documents about the plaintiffs’ acquisition, financing, ownership, and later attempted assignments of the securities. - Documents and communications concerning the plaintiffs’ reasons for acquiring the securities. - Documents and communications showing the plaintiffs’ or third parties’ analysis and understanding of the securities’ terms and Argentina’s payment obligations.

Argentina said the plaintiffs had refused to produce material beyond publicly available documents, certain communications with Argentina before the litigation, and incomplete account statements. The letter states that the plaintiffs had agreed to provide documents showing ownership from the time they filed suit in 2019 or later.

Reasons Argentina gave for seeking discovery

Argentina argued that acquisition and ownership information could bear on the elements of the plaintiffs’ breach-of-contract claims, including contract formation, performance, nonperformance, causation, and damages. It also said that information could bear on standing and whether the claims were timely. The letter cites an allegation that one plaintiff, WASO Holding Corporation, admitted purchasing most of its securities after filing suit and after the limitations period had expired.

Argentina also said the requested information was relevant to its defense under New York’s champerty statute. Champerty, as described in the letter, concerns acquiring a claim mainly for the purpose of bringing a lawsuit. Argentina sought information about the plaintiffs’ financing and ownership structures to investigate that defense.

Finally, Argentina argued that the plaintiffs’ understanding of the securities’ terms was relevant to claims involving the implied duty of good faith and fair dealing and to Argentina’s defense of mutual mistake. The letter says the parties disagreed about how a GDP-growth trigger should be calculated, including whether the agreement used a constant growth rate above 3 percent or a variable 1.263 percent factor. It also points to subpoenas the plaintiffs had served on financial institutions and a law firm for documents about drafting and issuing the securities.

Procedural status

The letter asks the court either to hold a pre-motion discovery conference or to permit Argentina to file a motion to compel. It states that counsel were to address the issues at a conference scheduled for November 9, 2021. The provided text does not state that the court granted, denied, or otherwise decided Argentina’s request.