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Posted by
BradyNet
(
Thursday, September 18, '03
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since i have sold all my Brazil on average a couple of points under current levels...
veni has performed nicely...guano is guano with a new pipeline...and both have oil support which is defensive from Brazil reality check (unpayable debt - insolvency, which is not illiquidity)...
farc has such support from GNOME that even with a crash in Brazil it should hold up...
Supposedly for the poor service offered by Union Fenosa, the govt renationalized the distribution service harmoniously---Union Fenos is happy about it, Inter American Development Bank went along with it(IADB lent some money to Union Fenosa at the time of privatization) and the DR govt is presenting it as a case of kicking out the bad distributor.
My guess: Union Fenosa wanted out(in secret) because of the bill collections problems and depreciation dominican currency. So they initiated in secret conversations with the govt, which in turn started theatrical performance: giving warning to Fenosa that the company will be deprivatized if the service is not improved. So finally the DR govt made good on the “threat.
Cost to the govt: 500 million dollars to be paid during 12 yrs at an interest rate of 12%. Fenosa paid a price of only 240 millions dollars at the time of privatization(which they never actually paid – Instead they supposed invested in the distribution and critics say that normal expenditures were put in the investment category).
Apparently every body is happy—DR, Union Fenosa, and IADB !
Well, Union Fenosa reciprocated the generosity of DR govt: The Spanish royalty and Aznar arranged a great royal reception for DR president a couple of days ago!
And shame to the IMF: Did not they just conclude an agreement with the DR without voicing any objections to the whole charade of deprivatization ?
:~))
<They appear to know what they are talking about> "they"? it was a ruling from a single U.S. Federal Judge. but i agree that "he" really seems to know what he is talking about.
-open drive C
-open folder "program files"
there you might find a lot of BS or unused programs (in individual folders) which you can delete. many programs have their own "uninstal". check and report what you found.
1) You are right wrt to the avaikable disk space if the Win 98 (unused) is uninstalled. The space freed 157 mb
2) < Add/Remove Programs -click on tab 'windows setup'. look at all installed components and list them >
Accessories 6.3 mb
Addressbook 1.8 mb
Communications 5.2 mb
Desktop themes 0.0
Games 0.0
Multilanguage 0.0
Online servbices 0.0
System tools 0.1 mb
Web TV for windows 0.0
In the last 3-4 days, I did uncheck(moved to disk D ) multilanguages, web TV, online services and the total space freed is not much—-10-15mb.
3) Unknown: After accounting for 450 mb of free space and 157 mb for Win 98, in disk C, about 1.4 gb is used . By what programs?.
Al analizar el proyecto de Presupuesto, López Murphy indicó: "el año que viene va a haber un esfuerzo significativo del Gobierno por alcanzar un importante superávit primario, que nunca hemos tenido en nuestra historia".
El ex ministro de Economía señaló que un "esfuerzo fiscal significativo forma parte de que lo que hay que hacer" y resaltó la decisión del Gobierno en tal sentido. >
x
FILEJOPY
'c^DTSTRICf
EM LTD.,
Plaintiff,
03 Civ. 2507 (TPG)
against -THE REPUBLIC OF ARGENTINA,
Defendant,
X
OPINION
89044
Plaintiff EM Ltd. ("EML") is the owner of bonds issued by the Republic of Argentina. The Republic has defaulted on the bonds. EML is suing to recover amounts due to it by virtue of the default. It has moved for summary judgment, claiming that the Republic's obligation is unconditional and that there are no defenses. The Republic opposes the motion, asserting various defenses. In addition, the Republic requests that this action be stayed because the Republic is engaged in efforts to achieve a debt restructuring. The motion of EML for summary judgment on its bond obligations is granted. The motion of the Republic for a stay of the proceedings is denied, except that the court stays execution of EML's judgment temporarily, as will be described.
-2-Facts
The Bond Issue
This case involves a series of Argentine pesos (AR$) bonds, issued by the Republic of Argentina, called the "10 % New AR$ Global Bond1' due September 19, 2008. The Series is numbered ISIN #XS0130278467. The Series was issued on June 19, 2001 and is due for principal payment on September 19, 2008. Interest payments on the bonds are paid bi-annually on March 19 and September 19 of each year.
EML owns bonds with a value of AR$ 595,396,345.
The Series was issued by the Republic of Argentina through its fiscal agent, Deutsche Bank AG, London. EML's claim, and defendants do not deny, that the Series is governed by the terms of (i) an October 19, 1994 Fiscal Agency Agreement ("FAA") between the Republic of Argentina and Bankers Trust Company (to which Deutsche Bank AG is the successor), (ii) an amendment to the FAA dated April 21, 1998, and (iii) two certificates setting forth the terms and conditions of the Series.
The FAA provides that failure to make any payment of principal or interest for 30 days after the applicable payment date constitutes an event of default. A declaration of a moratorium on the payment of principal or interest on its public external indebtedness is an event of default as well. Upon an
-3-event of default, a holder of not less than 25 % of the aggregate principal in the
Series is entitled to declare the entire Series in default. Such bondholder may give notice declaring the principal amount immediately due and payable.
Section 22 of the FAA states that the Republic of Argentina waives sovereign immunity and consents to jurisdiction in any state or federal court in the borough of Manhattan in the City of New York.
The certificates state that the bonds in the Series are "direct, unconditional, unsecured and unsubordinated obligations of the Republic."
The documents governing the Series contain terms regarding event of default, consent to suit, and jurisdictional waiver that are essentially identical to those pertaining to the bonds about which this court entered summary judgement in favor of the plaintiffs on May 14, 2003. Light water Corporation Ltd, v. The Republic of Argentina. Nos. 02 Civ. 3804(TPG), 02 Civ. 3808(TPG), 02 Civ. 5832(TPG), 2003 WL 1878420. They also contain essentially identical language about the bonds being "direct, unconditional, unsecured and unsubordinated obligations."
Default and Litigation
As discussed more extensively in the court's Lightwater opinion, 2003 WL 1878420 at *2, the Republic of Argentina is experiencing the worst
-4-economic crisis in its history. The country's gross domestic product has contracted severely each year since 1999, and tax collections have dropped sharply. During 2001 many businesses and individuals were making substantial withdrawals of capital from the banking system, with at least $20 billion being withdrawn. As a result, on December 1, 2001 the Republic imposed restrictions on depositors' access to bank accounts, freezing $60 billion in pesos and dollars and limiting withdrawals to $1,000 per month. On December 24, 2001, the Republic declared a moratorium on payments of principal and interest on the external debt of the Republic. This moratorium is still in effect. The Republic failed to make the March 19, 2001 interest payments on the bonds held by EML. On April 11, 2002, UBS Warburg, acting on behalf of EML, provided Deutsche Bank with notice of default and declared acceleration of principal. EML filed this lawsuit on April 10, 2003, EML claims that it is owed about $ 700 million in principal and interest. Moreover, EML seeks payment in U.S. dollars, at the rate of one U.S. dollar to one Argentine peso, claiming that such election is provided for under the terms and conditions of
-5-the bonds.
Discussion In the Lightwater, Old Castle, and Macrotecnic. cases this court
has already granted summary judgment to the plaintiff bondholders seeking to
collect on Argentine bonds which went into default as a result of the December
24, 2001 moratorium. This court found that:
The obligations of the Republic on the bonds involved in these lawsuits are unconditional. Sovereign immunity has been waived. The Republic defaulted on the bonds when it ceased to pay the interest. This would seem to mean that the Republic now owes the three plaintiffs principal and accrued interest.
2003 WL 1878420 at *4.
The court finds nothing in the record to distinguish this case as to EML's unconditional legal right to collect on the bonds. EML provided affidavits and statements of account to show that it is the beneficial owner of the bonds. Argentina has defaulted on the bonds by declaring a moratorium and failing to make interest payments. As the holder of not less than 25 % in aggregate principal amount of the securities of the Series, EML was entitled, by notice, to declare the principal amount owed to it due and payable immediately
-6-under the terms and conditions of the certificates and the FAA. EML has so
notified Argentina's fiscal agent. The Republic has not provided evidence sufficient to raise doubt as to the validity of EML's claim.
U.S. Dollar Election
The Republic claims that the acceleration provision in the certificate excludes the bondholder's election of payment of accelerated principal in U.S. dollars at the rate of one U.S. dollar for one Argentine peso. The Republic relies on the certificates, which provide:
If an Event of Default (as defined in the Fiscal Agency Agreement) occurs and is continuing then the holders of not less than 25 % in aggregate principal amount of the Securities of this Series, by notice in writing to the Republic at the specified office of the Fiscal Agent, shall declare the principal amount (that is, the par value) of all the Securities of this Series to be due and payable as set forth in the Fiscal Agency Agreement.
The Republic argues that, because the par or face value of the Series is stated in Argentine peso, that is AR$, the acceleration provision excludes payment in U.S. dollars.
The court finds the Republic's argument to be without merit. The
-7-certificates provide for an election as defined by the following language:
with respect to any payment, the Holder of this Security elects to receive such payment in U.S. dollars by giving notice to the Fiscal Agent in writing not later than the close of business on the fifth business day prior to the applicable Interest Payment Date, the Maturity Date or other date of payment, as the case may be . . . [emphasis added].
The date of payment of accelerated principal plus interest constitutes such "other date of payment," and notice of dollar election was given by EML in its notice of acceleration. Moreover, the certificates explicitly provide that such payment can be in U.S. dollars at the rate of one U.S. dollar for one Argentine peso:
The holder may elect to receive payments of principal and interest in U.S. dollars, in which case payment be made in U.S. dollars at the ratio of one U.S. dollar to one Argentine peso regardless of changes in foreign exchange rates.
Language in the acceleration provision that refers to "par value1' therefore does jjr not, in the opinion of the court, limit the accelerated payment to its par value
1')-', -'•
pr in Argentine pesos. EML is thus entitled to the par value of its bonds at an
-8-exchange rate of one U.S. dollar to one Argentine peso.
The above reasoning applies not only to the accelerated principal but to the defaulted interest payment due March 19, 2002.
N.Y. Judiciary Law S 489
The Republic contends that EML violated Section 489 of the New York Judiciary Law, which prohibits buying a bond "with the intent and for the purpose of bringing an action or proceeding thereon." The Republic argues that there are factual issues in this regard which require discovery and possible trial, and cannot be dealt with by summary judgment.
Relying on the Second Circuit's decision in Elliott Assoc. v. Banco de la Nacion. 194 F.3d 363 (2d Cir. 1999), the court has already addressed this issue in Lightwater. 2003 WL 1878420 at *4-5, and concluded as follows. Where a bond is purchased with the intent to collect on that bond, the statute is not violated even though there is also an intention to collect by a lawsuit if necessary.
The circumstances of the bonds purchase by EML demonstrate conclusively that EML bought its bonds with the intention of collecting on them, even though they clearly had in mind that a lawsuit might be necessary.
-9-There was, therefore, no violation of § 489. The court does not believe that
discovery and trial could develop any set of facts which would contradict these conclusions.
The Application for a Stay
The Republic asks the court to stay the proceedings under the doctrine of comity. The court, however, has addressed the basic issues regarding a stay in Lightwater. 2003 WL 1878420 at *5-6, and in that decision made an analysis of the controlling Second Circuit case, Pravin Banker Assoc. v. Banco Popular del Peru. 109 F.3d 850 (2d Cir. 1997). As a result of that analysis the court declined, in Lightwater and the accompanying cases, to stay the motions for summary judgment, and granted the motions. The court, however, stayed execution of judgment for one month. In those cases two further limited stays were granted, the last of which expires midnight September 16, 2003.
Despite the argument of the Republic to the contrary, the court rules that the EML case should be dealt with no differently from the other cases, at least as to the granting of summary judgment.
Therefore application to stay the summary judgment motion is
denied.
-10-
Conclusion
EML's motion for summary judgment is granted. Judgment will be entered for the par value of the bonds payable in U.S. dollars, plus accrued interest, at the rate of one U.S. dollar for one Argentine peso. The motion of the Republic for a stay of proceedings is denied, except that execution on EML's judgment is stayed until midnight September 16, 2003. A hearing will be held on September 15, 2003, regarding whether additional stays should be granted in this and other cases.
SO ORDERED.
Dated: New York, New York
September 12, 2003
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