Second Circuit Reversal of Argentine Bondholder Class Certification Orders
August 10, 2015
On August 10, 2015, a U.S. Court of Appeals for the Second Circuit panel led by Judge Chester Straub reversed decisions by the U.S. District Court for the Southern District of New York related to eight class actions brought by holders of defaulted Argentine bonds. The district court had broadened the scope of those classes, potentially exposing the Republic to hundreds of millions of dollars in liabilities to unknown Republic bondholders. For years, the Republic has defended itself against multiple class actions and demands by the class plaintiffs for overstated and improper judgments unsupported by actual proof of the holdings of the members of those classes.
The inflated $2.2 billion judgments plaintiffs originally sought and received from the district court were previously reduced, following the Republic’s previous victory on these issues, to $700 million. The Republic expects that the decision, which limits the classes to individuals who have held their bonds continuously from the beginning of the class period, will mean that no such over-inflated judgments can be entered again.