Capital Ventures International v. Republic of Argentina
652 F.3d 266
2d Cir.2011Background
- CVI sought attachments on Argentina's reversionary interest in Brady collateral; district court denied.
- The 2005 Brady exchange created a Continuation of Collateral Agreement preserving collateral during transfer.
- CVI I (2006) held CVI could attach Argentina's reversionary interest in remaining collateral.
- In 2010 Argentina proposed a smaller exchange; district court allowed modification of attachments to facilitate it.
- Major issue: whether attachments block the exchange and whether they could be modified to permit it.
- Court reverses district court, holding attachments cannot be modified to permit the exchange and remain valid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do CVI's attachments block the proposed exchange? | CVI attachments bar transfer of collateral to Brady holders. | Collateral seniority and Accord permit the exchange despite attachments. | Attachments block the exchange. |
| Was the district court authorized to modify attachments to allow the exchange? | Court could modify attachments if needed for enforcement of rights. | Amendment allowed by court to facilitate exchange. | No discretionary modification; attachments cannot be lifted for the exchange. |
| What governs the effect of Section 6.01 versus Section 9.05 in this context? | Section 6.01 governs reversion on exchange; attachment prevents destruction of rights. | Sections 9.05 and amendment provisions could affect the outcome. | Section 6.01 governs reversion; the proposed amendment cannot override CVI's attachment. |
| Does the 6.01 reversion right apply only to free and clear reversion upon non-security use, or also to ongoing security during an exchange? | Reversion remains beyond the exchange, preserving CVI's attachment. | Exchange uses collateral as continuing security for Brady debt. | Reversion under 6.01 would be compromised by the exchange; cannot proceed against attachments. |
| Should the attachments be modified or vacated on public-policy grounds? | Public policy disfavors undermining attachable interests. | Economics of sovereign exchange could justify discretionary modification. | No extraordinary circumstances to justify discretionary modification. |
Key Cases Cited
- Capital Ventures Int'l v. Republic of Argentina, 443 F.3d 214 (2d Cir. 2006) (affirmed attachability of Argentina's reversionary interest)
- Muzak Corp. v. Hotel Taft Corp., 1 N.Y.2d 42 (N.Y. 1956) (specific provisions govern when a general provision yields to a specific one)
- Aramony v. United Way of Am., 254 F.3d 403 (2d Cir. 2001) (importance of specific contract terms over general provisions)
- In re Amaranth Nat. Gas Commodities Litig., 711 F. Supp. 2d 301 (S.D.N.Y. 2010) (attachment implications for third-party interests)
- Fitchburg Yarn Co. v. Wall & Co., 46 A.D.2d 763 (1st Dep't 1974) (attachment bars transfer or interference with attached property)
- EM Ltd. v. Republic of Argentina, 473 F.3d 463 (2d Cir. 2007) (historical context of Argentina's creditor disputes)