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A09317 Summary:

BILL NOA09317
 
SAME ASNo Same As
 
SPONSORGonzalez-Rojas
 
COSPNSRDavila
 
MLTSPNSR
 
Amd §489, Judy L
 
Relates to claims against certain obligators; defines the term "eligible obligator" to mean any individual or entity who qualifies as a "debtor" pursuant to Title 11 of the United States Code.
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A09317 Actions:

BILL NOA09317
 
02/23/2022referred to judiciary
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A09317 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9317
 
SPONSOR: Gonzalez-Rojas
  TITLE OF BILL: An act to amend the judiciary law, in relation to claims against certain obligators   PURPOSE OR GENERAL IDEA OF BILL: Relates to claims against certain obligators   SUMMARY OF PROVISIONS: Section one of this bill amends section 489 of the judiciary law to prohibit the purchase of securities or other financial instruments for the sole purpose of litigation. Section two of this bill sets the effective date.   JUSTIFICATION: For years, vulture hedge funds have built their wealth off struggling nations by using the same playbook - they bet on a nation's economic failure and engage in predatory practices that increase poverty and get in the way of economic recovery. These hedge funds have made billions in profits while leaving nations with unsurmountable debts and a destabi- lized economy. Approximately half of sovereign debt contracts are governed by New York law, meaning if we change the law, we change the rules by which these hedge funds play. The Champerty Doctrine prohibits the purchase of securities or other financial instruments for the sole purpose of litigation. This bill will strengthen this provision and eliminate the safe harbor for transactions over $500,000 to prevent vulture funds from profiteering from countries' debt at the expense of people.   PRIOR LEGISLATIVE HISTORY: None   FISCAL IMPLICATIONS: None   EFFECTIVE DATE: This act shall take effect on the sixtieth day after it shall have become a law
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A09317 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9317
 
                   IN ASSEMBLY
 
                                    February 23, 2022
                                       ___________
 
        Introduced  by  M. of A. GONZALEZ-ROJAS -- read once and referred to the
          Committee on Judiciary
 
        AN ACT to amend the judiciary law, in relation to claims against certain
          obligators
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision 2 of section 489 of the judiciary law, as added
     2  by  chapter  394 of the laws of 2004, is amended and a new subdivision 4
     3  is added to read as follows:
     4    2. Except as set forth in  subdivision  three  of  this  section,  the
     5  provisions  of  subdivision  one  of this section shall not apply to any
     6  assignment, purchase or transfer hereafter made of one  or  more  bonds,
     7  promissory  notes,  bills  of  exchange,  book debts, or other things in
     8  action, or any claims or demands, if such assignment, purchase or trans-
     9  fer included bonds, promissory notes,  bills  of  exchange  and/or  book
    10  debts,  issued  by  or  enforceable  against  the  same eligible obligor
    11  (whether or not also issued by or enforceable against any other eligible
    12  obligors), having an aggregate purchase price of at least  five  hundred
    13  thousand dollars, in which event the exemption provided by this subdivi-
    14  sion  shall  apply as well to all other items, including other things in
    15  action, claims and demands, included in  such  assignment,  purchase  or
    16  transfer  (but  only  if  such  other items are issued by or enforceable
    17  against the same eligible obligor, or relate to or arise  in  connection
    18  with  such  bonds, promissory notes, bills of exchange and/or book debts
    19  or the issuance thereof).  For purposes of this  subdivision,  the  term
    20  "eligible  obligor" means an obligor that qualifies as a "debtor" within
    21  the meaning of Title 11 of the United States Code.
    22    4. For purposes of subdivision one  of  this  section,  an  assignee's
    23  intent and purpose in taking an assignment of a claim against an obligor
    24  that  is not an eligible obligor may be inferred from (a) the assignee's
    25  (or  its  affiliates')  history  of  acquiring  claims  at   significant
    26  discounts  from a bond, promissory note, bill of exchange, book debt, or
    27  other thing in action's face value and bringing legal actions to enforce
    28  such claims; (b) the assignee or any predecessor in title to  the  claim
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14673-01-2

        A. 9317                             2
 
     1  having refused to participate in a consensual settlement of the claim if
     2  holders  of  notes not less than sixty-six and two-thirds percent of the
     3  outstanding amount of the notes of similar claims  against  the  obligor
     4  had  agreed  to  accept the terms of that settlement; and (c) such other
     5  facts or circumstances as a court may find  relevant  in  assessing  the
     6  assignee's intent and purpose in taking the assignment.
     7    §  2.   This act shall take effect on the thirtieth day after it shall
     8  have become a law. Effective immediately, the addition, amendment and/or
     9  repeal of any rule or regulation necessary  for  the  implementation  of
    10  this  act  on its effective date are authorized to be made and completed
    11  on or before such effective date.
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