Exchange Bondholder Group v. NML Capital, Ltd.

Linked with:

• Republic of Argentina v. NML Capital, Ltd.

Issue: (1) Whether, where a foreign nation has refused to make payments to holders of its defaulted debt instruments, a federal court can coerce payment by issuing an injunction preventing a non-party trustee from paying non-party holders of the sovereign’s non-defaulted debt instruments unless the sovereign also satisfies in full the claims of the defaulted debt holders, thereby imposing otherwise non-existent conditions on the payment rights of the non-parties and creating a grave risk of default; (2) whether the Fifth Amendment’s prohibitions against government deprivations and takings of private property solely for the purpose of conferring a private benefit bar a federal court from granting equitable relief that conditions the payment rights of the non-party, non-defaulted debt holders on the sovereign’s payment of overdue sums to parties who are holders of the defaulted debt; and (3) whether non-party holders of debt instruments have standing to appeal the district court’s entry of an order that prohibits payments on those specific debt instruments — and no others — until the debtor has satisfied unrelated overdue payments on other debt instruments.