Cleary Gottlieb represented the Republic of Argentina in a judgment on May 2, 2023, in which the U.S. Court of Appeals for the Second Circuit affirmed the district court’s dismissal of a $35.8 million principal bondholder claim.
In affirming a ruling by Judge Loretta A. Preska of the U.S. District Court for the Southern District of New York, the three-judge panel (Sullivan, Calabresi, and Lynch, JJ) held that the plaintiffs in this case, who had tendered into a trust their New York-law governed dollar bonds in exchange for Argentine-law governed tax credit certificates, lacked standing to sue on the dollar bonds. Agreeing with the district court, the Court of Appeals held plaintiffs lacked standing because the Argentine trustee holding the defaulted dollar bonds had not delegated the plaintiffs the right to sue. The Second Circuit also rejected the plaintiffs’ alternative argument that the trustee had ratified their standing to sue, making them the “real party in interest” under Federal Rule of Civil Procedure 17.