09-2707-cv (L)
NML Capital v. Argentina


                           UNITED STATES COURT OF APPEALS
                               FOR THE SECOND CIRCUIT

                                        SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.

      At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New
York, on the 17th day of August, two thousand eleven.

PRESENT: GUIDO CALABRESI,
                 REENA RAGGI,
                 RICHARD D. CUDAHY,*
                                 Circuit Judges.
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NML CAPITAL,
                                 Plaintiff-Appellee-Cross-
                                 Appellant,

MONTREUX PARTNERS, CORDOBA CAPITAL,
LOS ANGELES CAPITAL, FFI FUND & FYI,
WILTON CAPITAL,
                   Plaintiffs-Appellees,
                                                                        Nos. 09-2707-cv (L),
                                                                        09-2708-cv (CON),
                                                                        09-2867-cv (XAP),
                                                                        09-2710-cv (CON),
                                                                        09-2711-cv (CON),
                                                                        09-2712-cv (CON),
                    v.                                                  09-2713-cv (CON),
                                                                        09-2714-cv (CON),
                                                                        09-2715-cv (CON),


          *
        Circuit Judge Richard D. Cudahy of the United States Court of Appeals for the
Seventh Circuit, sitting by designation.
                                                                        09-2716-cv (CON),
                                                                        09-2717-cv (CON),
                                                                        09-2810-cv (CON)
THE REPUBLIC OF ARGENTINA,
                                 Defendant-Appellant-Cross-
                                 Appellee.
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FOR APPELLANT:                           Jonathan I. Blackman, Carmine D. Boccuzzi, Christopher
                                         P. Moore, Cleary Gottlieb Steen & Hamilton LLP, New
                                         York, New York, for Defendant-Appellant-Cross-
                                         Appellee the Republic of Argentina.

FOR APPELLEES:                           Robert A. Cohen, Dennis H. Hranitzky, Dechert LLP,
                                         New York, New York, for Plaintiff-Appellee-Cross-
                                         Appellant NML Capital.

                                         Walter Rieman, Paul, Weiss, Rifkind, Wharton &
                                         Garrison LLP, New York, New York, for Plaintiffs-
                                         Appellees Montreux Partners, Cordoba Capital, Los
                                         Angeles Capital, and Wilton Capital.

                                         Stephen D. Poss, Robert D. Carroll, Goodwin Procter
                                         LLP, Boston, Massachusetts, for Plaintiffs-Appellees FFI
                                         Fund & FYI.

        Appeal from the United States District Court for the Southern District of New York

(Thomas P. Griesa, Judge).

        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the amended judgment entered on June 16, 2009, in Nos. 09-2708-cv (CON)

and 09-2867-cv (XAP) is AFFIRMED in part and VACATED in part, and that the judgments

entered on June 1, 16, and 26, 2009 , and February 2, 2010, in the remaining above-captioned

actions are AFFIRMED.

        Defendant the Republic of Argentina (“Argentina”) appeals from judgments awarding

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plaintiffs, the beneficial owners of certain Floating Rate Accrual Notes (“FRANs”) issued

by Argentina: (1) all outstanding principal; (2) missed biannual interest payments that came

due prior to maturity or acceleration; (3) 9% statutory interest on those missed interest

payments, see N.Y. C.P.L.R. §§ 5001(a), 5004; (4) interest on principal at the contract rate

from the date of maturity or acceleration to the date of judgment; and (5) 9% statutory pre-

judgment interest on unpaid post-maturity (but not post-acceleration) contract interest.

Plaintiff NML Capital cross-appeals the denial of statutory pre-judgment interest on unpaid

post-acceleration contract interest. In a prior opinion, we affirmed all aspects of the

judgments except the two noted as (4) and (5). See NML Capital v. Republic of Argentina,

621 F.3d 230, 242-43 (2d Cir. 2010). We reserved judgment on those two issues pending a

response from the New York Court of Appeals to three certified questions:

       (a) Is a bond provision requiring the issuer of the bond to make, on dates
       certain, bi-annual interest payments on principal “until the principal hereof is
       paid” properly construed as an obligation to pay interest for so long as the
       principal is outstanding, including after the date of maturity?

       (b) Is a bond provision requiring the issuer of the bond to make, on dates
       certain, bi-annual interest payments on principal “until the principal hereof is
       paid” properly construed as an obligation to pay interest for so long as the
       principal is outstanding, including after acceleration?

       (c) If either of the foregoing questions is answered in the affirmative, does that
       obligation provide a valid basis for awarding statutory interest under N.Y.
       C.P.L.R. § 5001(a) on post-maturity or post-acceleration interest payments that
       came due but were never paid?

Id. at 244. On June 30, 2011, the New York Court of Appeals answered all three questions

in the affirmative, holding that (1) Argentina’s obligation to make biannual interest payments


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at the contract rate continued after maturity and acceleration until payment was made or

judgment was entered, and (2) plaintiffs were entitled to statutory pre-judgment interest on

post-maturity and post-acceleration contract interest payments from the date those payments

became due. See NML Capital v. Republic of Argentina, --- N.Y.2d ----, 2011 WL 2567294

(June 30, 2011).

       In light of these responses, we conclude, and the parties agree, that the judgments

entered by the district court in the ten actions involving non-accelerated FRANs should now

be affirmed in their entirety. As to the one action in which NML Capital sued on its

accelerated FRANs, we conclude, and the parties agree, that the amended judgment entered

on June 16, 2009, correctly awarded contract interest on principal from the date of

acceleration to entry of judgment, but erred in denying NML Capital statutory pre-judgment

interest on the unpaid post-acceleration contract interest. The parties disagree, however, as

to how to effect entry of a correct judgment in the latter action. NML Capital urges that we

vacate the district court’s amended judgment and remand for entry of a new judgment that

includes (1) unpaid principal, (2) unpaid pre- and post-acceleration contract interest on

principal, and (3) statutory interest on unpaid contract interest payments from the date that

such payments became due to entry of judgment on remand. Argentina submits that we

should remand with instructions to modify the existing judgment to include additional

statutory pre-judgment interest on unpaid post-acceleration contract interest calculated to the

June 16, 2009 entry of the amended judgment. The difference in the parties’ positions is

significant. Argentina estimates that a new judgment that includes additional contractual and

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statutory interest calculated to entry of judgment on remand as urged by NML Capital would

result in approximately $119 million in additional pre-judgment interest that accrued after

the amended judgment was entered on June 16, 2009.

       We now reject NML Capital’s argument and remand as urged by Argentina. In

general, pre-judgment interest ceases to accrue, and post-judgment interest begins to accrue,

as of the date that judgment first “is ascertained in a meaningful way and supported by the

evidence.” Adrian v. Town of Yorktown, 620 F.3d 104, 107 (2d Cir. 2010) (internal

quotation marks omitted); see Westinghouse Credit Corp. v. D’Urso, 371 F.3d 96, 103 (2d

Cir. 2004) (observing that date judgment was meaningfully ascertained separates

computation of interest in pre-judgment and post-judgment periods). Here, the district

court’s amended judgment correctly determined liability, including Argentina’s obligation

to pay post-acceleration interest on principal at the contract rate to entry of judgment. The

amended judgment’s only omission was its failure to include the additional 9% statutory pre-

judgment interest on unpaid post-acceleration contract interest. In these circumstances, we

conclude that judgment was meaningfully ascertained when the amended judgment was

entered on June 16, 2009. See, e.g., Goodrich Corp. v. Town of Middlebury, 311 F.3d 154,

177-78 (2d Cir. 2002) (holding that judgment on contribution claims was meaningfully

ascertained despite erroneous omission of certain statutory pre-judgment interest); see also

Spodek v. Park Prop. Dev. Assocs., 96 N.Y.2d 577, 581, 733 N.Y.S.2d 674, 676 (2001)

(holding that N.Y. C.P.L.R. § 5001(a) “permits a creditor to recover prejudgment interest on

unpaid interest and principal payments awarded from the date each payment became due

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under the terms of the promissory note to the date liability is established” (emphasis added)).

Accordingly, pre-judgment interest ceased to accrue when the amended judgment was

entered on June 16, 2009. NML Capital will be reimbursed for the time value of the

corrected judgment award, including the additional statutory pre-judgment interest through

June 16, 2009, by an award of post-judgment interest. See generally 28 U.S.C. § 1961(a);

Adrian v. Town of Yorktown, 620 F.3d at 107-08.

       For the foregoing reasons, the district court’s judgments are AFFIRMED except that

the amended judgment entered on June 16, 2009, in Nos. 09-2708-cv (CON) and 09-2867-

cv (XAP) is VACATED insofar as it denied NML Capital statutory pre-judgment interest on

unpaid post-acceleration contract interest. The case is REMANDED for inclusion of such

interest, as well as post-judgment interest due under federal law, in the judgment consistent

with this order.

                                    FOR THE COURT:
                                    CATHERINE O’HAGAN WOLFE, Clerk of Court




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