Aurelius Capital Master, Ltd. v. The Republic of Argentina

Background

The Republic of Argentina requested a discovery conference under the court’s individual practices and Local Civil Rule 37.2. The letter concerns claims by plaintiffs seeking hundreds of millions of dollars based on GDP-linked securities issued in 2005 and 2010. Argentina stated that the securities had otherwise paid nearly $10 billion.

Argentina’s discovery requests

Argentina said plaintiffs had taken the position that their files contained no relevant or discoverable information beyond proof that they owned the securities. According to Argentina, plaintiffs had refused to identify employees responsible for buying the securities and had produced only incomplete account statements, publicly available documents, and certain communications with Argentina.

Argentina asked the court to require responses to interrogatories and document requests concerning:

- plaintiffs’ acquisition, ownership, financing, and later efforts to assign the securities; - plaintiffs’ reasons for acquiring the securities and related financing and ownership information; and - plaintiffs’ and third parties’ analysis of the securities’ terms and Argentina’s payment obligations.

Why Argentina said the information was relevant

Argentina argued that acquisition and ownership information concerned the elements of plaintiffs’ breach-of-contract claims, as well as standing and the timeliness of the claims. The letter also stated that WASO Holding Corporation had admitted, through an amended complaint, that it purchased most of its securities after filing suit and after the limitations period had expired.

Argentina further said that financing and ownership-structure information could support its defense of champerty. Champerty is a legal rule addressing acquisition of a claim for the purpose of bringing a lawsuit. Argentina had pleaded that defense and argued that discovery could show whether bringing these claims was plaintiffs’ main reason for acquiring the securities.

Argentina also argued that plaintiffs’ understanding of the securities’ terms was relevant to claims that Argentina breached the implied covenant of good faith and fair dealing and to Argentina’s mutual-mistake defense. The letter said plaintiffs’ expectations about how compensation would be calculated could bear on whether Argentina’s conduct violated an implied contractual obligation. Argentina also referred to the parties’ competing understandings of the GDP-growth trigger and to subpoenas plaintiffs had served on financial institutions and a law firm concerning the securities’ drafting and issuance.

Court action

The text provided is a letter from Argentina’s counsel dated November 2, 2021, together with a notice that counsel should be prepared to address the issues at a conference set for November 9, 2021. Judge Loretta A. Preska did not, in the provided text, grant or deny a motion to compel, resolve the discovery dispute, or decide the parties’ underlying claims. The provided material therefore reflects a discovery-related conference setting rather than a ruling on the merits.