| Ecuador $17B Bond
Restructuring To Go Forward After Restraining
Order Denied in SDNY
By Matthew
Russell Lee, Patreon Thread
BBC
- Guardian
UK - Honduras
- The
Source
SDNY COURTHOUSE,
July 31 – Ecuador's
restructuring of $17 billion
of bonds, the tender for which
was extended to August 3, was
the subject of a request for a
Temporary Restraining Order
before U.S. District Court for
the Southern District of New
York Judge Valerie E. Caproni
who held arguments and ruled
on July 31. Inner City Press
live tweeted it, here:
"Contrarian
Capital Markets and GMO
Emerging Country Debt Fund"
are arguing that Ecuador is
lying. Clark of Lathan for
plaintiffs: "Even today
there's some question whether
there has been a good faith
communication of the
suspension."
Judge Caproni: I
saw the press release.
Clark: The
evidence will show Clear
Stream is telling people they
had to tender today.... This
is securities fraud. It
shouldn't be that a deal this
big is pushed through like
this.
Dennis Tracey of
Hogan Lovells, for Ecuador:
"If Republic does not get a
super majority, the exchange
does not occur."
Judge Caproni:
It's self-executing?
Tracey:Yes....
The Republic *is* acting
within the 4 corners of the
indenture. A super majority
can waive any provision of the
bonds, prospectively. Here,
the offer was to exchange
bonds, one for the other, and
eliminate the Most Favored
Nations provision
Tracey, for
Ecuador: We did not have equal
conversations with all
bondholders. But we didn't say
we did. With $17 billion of
bonds, we can't speak with
every bondholder.
Judge Caproni: I
am prepared to rule.
Plaintiffs want Wells Fargo to
return their tendered bonds.
The tender was extended to
August 3. Now, the temporary
restraining order IS
DENIED. Some of this
will have to be decided by the
Arbitral Tribunal in
London. But the TRO is
denied.
Update, later:
Judge Caproni is still
blasting away at plaintiffs'
allegations and complaint. Now
she says, "That they futzed
around with investors for 2
weeks is not material... In
short, based on the complaint
that has been filed,
plaintiffs are not likely to
prevail."
The ruling is
finished. A lawyer / partner
says, Now we're going to buy
our associates a drink.
Judge Caproni: A
socially distanced drink!
Bottoms up.
The case is Contrarian
Emerging Markets, L.P., et al.
v. The Republic of Ecuador,
20-cv-5890 (Caproni).
***
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