The opinion is Bruce v. Citigroup Inc., Case No. 22-1000, decided August 2, 2023, by the U.S. Second Circuit Court of Appeals.
The opinion addresses this question:
The Bankruptcy Protector
This quarterly civil fraud update provides a summary of reported decisions handed down in the courts of England and Wales in the period April - June 2021.
CONTEMPT OF COURT
In this memorandum opinion, the Court of Chancery denied the plaintiffs’ (Roseton OL LLC and Danskammer OL, LLC) motion seeking to temporarily restrain the consummation of a transaction pursuant to which defendant Dynegy Holdings, Inc. (“DHI”) would transfer its most profitable power plants from existing subsidiaries to new bankruptcy remote subsidiaries.
“Survey and test prospective action before undertaking it. Before you proceed, step back and look at the big picture, lest you act rashly on raw impulse”
- Epictetus
“Your hindsight on this case, was far more accurate than his foresight”
- David Carpenter
INTRODUCTION
Introduction
In Allenger, Shiona (Trustee-in-bankruptcy of the Estate of Pelletier, Richard Paul Joseph) v Pelletier, Olga and another [2020] SGHC 279, Rajah and Tann Singapore's Fraud, Asset Recovery and Investigations team led by partners Danny Ong and Yam Wern-Jhien, assisted by Bethel Chan and Chen Lixin, prevailed in a significant decision examining principles governing the grant of freezing injunctions against foreign defendants in the context of a cross-border insolvency and asset recovery claim.
A bondholder of Argentine restructured debt filed for an injunction before the Argentine courts against the Bank of New York Mellon, as trustee under the exchange bonds. The plaintiff claimed the distribution of funds – frozen by a US court order – that Argentina had deposited into the Bank of New York Mellon's account to comply with the payments under those bonds. The Argentine courts dismissed the request, concluding that they lacked jurisdiction.
The Republic of Argentina returned to global debt markets after a 15-year absence on April 19, 2016, when it sold $16 billion in bonds to fund a series of landmark settlements reached earlier this year with holdout bondholders from the South American nation’s 2005 and 2010 debt restructurings. This latest development in the more than decade-long battle between Argentina and the holdouts—led by hedge funds Aurelius Capital Master Ltd. (“Aurelius”) and NML Capital Ltd.
Foreign sovereigns have long assumed that the Foreign Sovereign Immunities Act (FSIA) provides them with substantial protection against litigants in United States courts. Although the immunity afforded by the FSIA has never been absolute, two recent developments in the Supreme Court of the United States – both involving the Republic of Argentina – have expanded plaintiffs’ ability to locate sovereign assets and force satisfaction of a judgment, notwithstanding the seemingly broad protections of the FSIA.
The rulings are important for sovereign investors for a number of reasons:
The long-running dispute over the payment of Argentina's sovereign debt, on which the South American nation defaulted for the second time in July 2014, continues to be particularly active.