Bainbridge Fund LTD v. The Republic of Argentina

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

BAINBRIDGE FUND LTD.,

Plaintiff,

No. 16 CV 8605 (LAP)

-against-

MEMORANDUM & ORDER

THE REPUBLIC OF ARGENTINA,

Defendant.

LORETTA A. PRESKA, Senior United States District Judge:

Plaintiff Bainbridge Fund Ltd. (“Bainbridge”) brought suit

against the Republic of Argentina (“Argentina” or the

“Republic”) seeking to recover amounts due as a result of the

Republic’s default on certain global debt securities.

Bainbridge moved for summary judgment in May 2020. (See dkt.

nos. 28-31.) On December 1, 2020, on consent of the Republic,

the Court granted summary judgment to Bainbridge on its claim to

relief with respect to the “US040114GG96 Bonds,” which is

governed by the 1994 Fiscal Agency Agreement (the “FAA”). (Dkt.

no. 40.) Consistent with that order, the Court entered judgment

against the Republic in the amount of $95,424,899.38, comprising

principal and interest owed on the bonds through December 1,

2020. (Dkt. no. 41. (the “Judgment”).)

According to Bainbridge, and not disputed by the Republic,

Bainbridge has attempted to collect on the judgement but has not

met with success. (Dkt. no. 53-3.) Thus, Bainbridge moves

pursuant to FRCP 69(a)(1) and NY CPLR 5225(a) for an order

compelling the Republic to turnover foreign assets sufficient to

satisfy the judgment against it. (Dkt. nos. 51-53.)

For the reasons that follow, the motion is denied without

prejudice.

A. Underlying Agreements

1. The FAA

The parties agree that the bonds at issue are governed by

the FAA. Pursuant to the FAA, the Republic consented to

personal jurisdiction in this Court and agreed that the FAA is

governed by and construed in accordance with New York law.

(Dkt. no. 53-4, Ex. A ¶¶ 22, 23.) The Republic also

“irrevocably waive[d] and agree[d] not to plead any immunity

from the jurisdiction of any such court to which it might

otherwise be entitled in any action arising out of or based on

the Securities or this Agreement by the holder of any Security.”

(Id. ¶ 22.)

2. Form of Securities Agreement

The FAA provides that securities issued pursuant to the FAA

shall be issued “substantially in the form” of the Form of

Securities Agreement appended to the FAA as Exhibit A. (Id.

¶ 1(b)). As relevant here, the Form of Securities Agreement

confirms that the “Republic has in the [FAA] irrevocably

submitted to the jurisdiction of any New York state or federal

court sitting in the Borough of Manhattan . . . over any suit,

action, or proceeding against it or its properties, assets or

revenues with respect to the Securities of this Series of the

[FAA].” (Id. A-17.) The Republic further “agree[d] that a

final non-appealable judgment in any such Related Proceeding

(the “Related Judgment”) shall be conclusive and binding upon it

and may be enforced in any Specified Court . . . by a suit upon

such judgment.” (Id.) And the Republic agreed that

[t]o the extent that the Republic or any of its

revenues, assets or properties shall be entitled . . .

to any immunity from suit, from the jurisdiction of

any such court, from set-off, from attachment prior to

judgment, [from] attachment in aid of execution of

judgment, from execution of a judgment or from any

other legal or judicial process or remedy, and to the

extent that in any such jurisdiction there shall be

attributed such an immunity, the Republic has

irrevocably agreed not to claim and has irrevocably

waived such immunity to the fullest extent permitted

by the laws of such jurisdiction (and consents

generally for the purposes of the Foreign Sovereign

Immunities Act [the (“FSIA”)] to the giving of any

relief or the issue of any process in connection with

any Related Proceeding or Related Judgement), provided

that such waiver shall not be effective (i) with

respect to assets which constitute freely available

reserves pursuant to Article 6 of the Convertibility

Law . . . .

(Id. at A-18.)

3. Specimen Note

Consistent with the Form of Securities Agreement, the

actual Specimen Note for the US040114GG96 Bond at issue here

contains substantially, but not entirely, the same language.

In addition to consenting to the jurisdiction of New York state

and federal courts and agreeing that final non-appealable

judgments are “conclusive and binding” and “may be enforced” by

suit, The Republic agreed that

[t]o the extent that the Republic or any of its

revenues, assets or properties shall be entitled . . .

to any immunity from suit . . . from execution of a

judgment or from any other legal or judicial process

or remedy . . . the Republic has irrevocably agreed

not to claim and has irrevocably waived such immunity

to the fullest extent permitted by the laws of such

jurisdiction and consents generally for the purposes

of the [FSIA] to the giving of any relief . . . in

connection with any . . . Related Judgment, provided

that attachment prior to judgment or attachment in aid

of execution shall not be ordered by the Republic’s

courts with respect to (i) the assets which constitute

freely available reserves pursuant to Article 6 of the

Convertibility Law . . . .

(Dkt no. 61-1 (the “Specimen Note”) at 12.)

B. Legal Standard for Turnover

Federal Rule of Civil Procedure 69(a)(1) provides that the

“procedure on execution” and “proceedings supplementary to and

in aid of judgment or execution” enforcing a money judgment

“must accord with the procedure of the state where the court is

located.” See, e.g., All. Bond Fund, Inc. v. Grupo Mexicano De

Desarrollo, S.A., 190 F.3d 16, 20 (2d Cir. 1999). NY CPLR

5225(a) in turn sets forth New York’s procedure for enforcement

of money judgments against property in the possession of the

judgment debtor. See, e.g., Koehler v. Bank of Berm. Ltd., 12

N.Y.3d 533, 537-38 (2009). It provides that “where it is shown

that the judgment debtor is in possession or custody of money or

other personal property in which he has an interest, the court

shall order that the judgment debtor pay the money, or so much

of it as is sufficient to satisfy the judgment, to the judgment

creditor.” (N.Y. C.P.L.R. 5225(a)).

Turnover orders pursuant to CPLR 5225(a) “are effective

against assets regardless of their location.” Motorola Credit

Corp. v. Uzan, 739 F. Supp. 2d 636, 641 (S.D.N.Y. 2010); see

also Koehler, 12 N.Y.3d at 541 (“[A] New York court with

personal jurisdiction over a defendant may order him to turn

over out-of-state property”). Indeed, New York courts routinely

order parties subject to New York courts’ jurisdiction to

satisfy money judgments with funds located in bank accounts

outside of New York, both within and without the United States.

See e.g., Gryphon Domestic VI, LLC v. APP Int’l Fin. Co., B.V.,

836 N.Y.S.2d 4, 12 (1st Dep’t 2007) (holding that turnover order

“should have included the defendants’ property in Indonesia”);

Miller v. Doniger, 814 N.Y.S.2d 141, 141 (1st Dep’t 2006)

(affirming order directing judgment debtor to “turn over his

out-of-State Wachovia account”); Starbare II Partners L.P. v.

Sloan, 629 N.Y.S.2d 23 (1st Dep't 1995) (directing defendant to

turn over artwork located outside the state pursuant to CPLR

5225(a)); see also In re Feit & Drexler, Inc. v. Drexler, 760

F.2d 406, 414 (2d Cir. 1985) (holding that the district court,

sitting in bankruptcy, had the power to compel the defendant to

deliver property from outside the court's territorial

jurisdiction because the court had personal jurisdiction over

the defendant); In re Gaming Lottery Sec. Litig., No. 96-cv-5567

(RPP), 2001 WL 123807, at *3 (S.D.N.Y. Feb. 13, 2001) (noting

that the Court “has the power under CPLR § 5225(a) to order a

turnover of funds held in another jurisdiction” and ordering the

turnover of funds “in an account at the Royal Bank of

Scotland”). In Koehler, the New York Court of Appeals expressly

addressed funds held outside New York, holding that “CPLR

article 52 contains no express territorial limitation barring

the entry of a turnover order that requires . . . [the transfer]

of money or property into New York from another state or

country.” 12 N.Y.3d at 539.

C. Discussion

The Republic opposes the entry of an order directing it to

turnover assets held by Argentina’s central bank by arguing,

among other things, that: (1) the assets are immune from

turnover under the FSIA because they are located outside the

United States and (2) Bainbridge has not shown that the assets

are subject to execution once brought into the United States

under the FSIA. The Court discusses these arguments below.

1. The Assets Are Not Immune from Turnover Under the

FSIA By Virtue of Being Outside the United States

In 2014, the Supreme Court addressed whether the FSIA

provided “absolute execution immunity” such that a judgment

creditor is unable to obtain post-judgment discovery of foreign-

state assets held outside the United States. See Republic of

Arg. v. NML Cap., Ltd., 573 U.S. 134, 143 (2014) (emphasis

omitted). The Supreme Court held that Section 1609 of the FSIA

“immunizes only foreign-state property ‘in the United States.’”

Id. at 144. Because the FSIA extends only to assets in the

United States, discovery into foreign assets was not proscribed

by the FSIA.

The Court of Appeals interpreted the FSIA post-NML Capital

in Peterson v. Islamic Republic of Iran, which, although not

binding, is instructive. 876 F.3d 63, 90 (2d Cir. 2017) cert.

granted, judgment vacated sub nom. Clearstream Banking S.A. v.

Peterson, 140 S. Ct. 813 (2020), and adopted in part, 963 F.3d

192 (2d Cir. 2020). In Peterson, the Court of Appeals addressed

whether the FSIA barred a court that had personal jurisdiction

over a non-sovereign third party from issuing an order pursuant

to CPLR 5225 requiring that non-sovereign third party to recall

to New York property belonging to the sovereign. 876 F.3d at

90. The Court of Appeals found that “[t]he FSIA does not by its

terms provide execution immunity to a foreign sovereign's

extraterritorial assets” and thus that “Section 1609's grant of

execution immunity applies only to assets located ‘in the United

States.’” Id. at 90-91. The Court of Appeals reasoned that the

“Supreme Court's view set forth in NML Capital appears

unequivocal: ‘[A]ny sort of immunity defense made by a foreign

sovereign in an American court must stand on the Act's text. Or

it must fall.’” Id. (quoting NML Capital, 573 U.S. at 141-42).

Because, by its plain terms, the FSIA applies only to property

in the United States, the Court of Appeals found that “NML

Capital and Koehler, when combined, do authorize a court sitting

in New York with personal jurisdiction over a non-sovereign

third party to recall to New York extraterritorial assets owned

by a foreign sovereign.” Id. at 92. In so holding, the Court

of Appeals disavowed “the many cases cited by the defendants for

the proposition that a foreign sovereign's extraterritorial

assets are absolutely immune from execution” because they “were

decided before the Supreme Court's decision in NML Capital,

which made clear that such cases predating NML Capital are no

longer binding on this discrete point.” Id. at 91.

The Court finds Peterson persuasive and applicable here.

Though Peterson involved a non-sovereign third party, the Court

of Appeals’ reasoning extends to any party over which the Court

has personal jurisdiction. Indeed, the Court of Appeals stated

that “[h]ad Koehler arisen in the context of an exercise of in

personam jurisdiction over a foreign sovereign—it did not—the

FSIA’s grant of jurisdictional immunity would supersede contrary

state law.” Peterson, 876 F.3d at 92. This suggests that

Koehler applies so long as there is no conflict with the FSIA.

Here, there is no conflict because the Court indisputably has

personal jurisdiction over the Republic consistent with the

FSIA. (Judgment; see also dkt. no. 53-4 Ex. A ¶ 22.) Thus, New

York state law is not, in this instance, contrary to the FSIA,

and the FSIA, therefore, does not supersede CPLR 5225 and

prevent the Court from ordering the Republic, a judgment debtor

over which it has personal jurisdiction, to bring assets from

outside of New York into New York to pay Bainbridge. The

execution immunity provision of the FSIA is no bar because by

its plain terms it “immunizes only foreign-state property ‘in

the United States.’” NML Capital, 573 U.S. at 144; see also

Peterson, 876 F.3d at 92-93 (same), which the assets Bainbridge

seeks are indisputably not. Thus, the FSIA does not immunize

these assets.

2. Whether the Assets Are Immune from Execution Once

Brought into the United States

This does not end the sovereign immunity analysis.

Peterson called for a “two-step process” in which the relevant

asset is first recalled and then analyzed pursuant to the FSIA.

Peterson, 876 F.3d at 95. The Court of Appeals reasoned that,

once the asset was recalled to the United States, it would

“qualify as an asset ‘in the United States of a foreign state’”

that should “be afforded execution immunity.” Id. at 94

(quoting 28 U.S.C. § 1609). Thus, the Court must consider

whether that asset “is subject to the execution-immunity

exceptions relied on by” the party seeking to execute against

those assets. Id.

The Court of Appeals suggested that the execution-immunity

exception analysis occur after the asset is recalled. However,

the Court of Appeals was faced with different facts from those

present here. In Peterson, the question was whether a

sovereign’s asset that was in the possession of a third party,

and not in the possession of or available for use by the

sovereign, could be recalled. Here, the assets Bainbridge seeks

belong directly to the Republic and, the Republic contends, are

used for government functions. If the Court followed the two-

step process set out in Peterson and ordered that assets that

are ultimately subject to execution immunity be brought to the

United States, the functioning of the Republic’s government

would be subject to potentially substantial, and unwarranted,

disruption and interference with its sovereign activity,

including the provision of services to its citizens. Under

these circumstances, the Court determines that the more prudent

course is to evaluate whether the assets are subject to

execution immunity before ordering that they be brought to the

United States. The Court therefore must consider whether the

assets that Bainbridge seeks to execute against would, if

recalled, be subject to execution immunity pursuant to 28 U.S.C.

section 1610(a).

Bainbridge contends that the Republic’s assets are not

immune from execution pursuant to the exception set forth in 28

U.S.C. section 1610(a)(1). Bainbridge argues that: (1) due to

the Republic’s broad waivers of sovereign immunity contained in

the documents governing the bonds, the Republic waived the

requirement that the asset be used for commercial activity in

the United States and (2) that even if the Republic did not

waive the commercial activity requirement, the relevant assets

were used for commercial activity in the United States. (Dkt.

no. 52 at 12-14; dkt. no. 66 at 5-10.) The Court address each

argument in turn.

a. The Republic did Not Waive the Requirement

that the Assets be Used for Commercial

Activity in the United States

Bainbridge argues that the Republic’s “consent[] generally

for the purposes of the [FSIA] to the giving of any relief . . .

in connection with any . . . Related Judgment” necessarily

waived “any argument that the funds are not used for a

‘commercial activity in the United States.’” (Dkt. no. 52 at 13

(first quoting the Specimen Note at 12 and then 28 U.S.C.

§ 1610(a).) Bainbridge questions how one could “consent to ‘any

relief’ under the FSIA and then argue that the FSIA precludes

the relief sought” (dkt. no. 52 at 13) or how “a limitation

imposed solely by the FSIA” can “survive a consent to any relief

for a judgment obtained pursuant to the FSIA” (dkt. no. 66 at

7).

Bainbridge employs rhetorical questions because the answer

the case law supplies is not to its liking. Pursuant to section

1610(a), execution is authorized “only if the property is ‘used

for a commercial activity in the United States,’ even if the

foreign sovereign has waived its immunity.” Aurelius Cap.

Partners, LP v. Republic of Arg., 584 F.3d 120, 130 (2d Cir.

2009) (quoting 28 U.S.C. § 1610(a)) (emphasis added). Indeed,

in EM Ltd. v. Republic of Arg., while evaluating an identical

waiver, the Court of Appeals found “without merit” the argument

that the waiver, which provided that the Republic “irrevocably

agreed not to claim and has irrevocably waived . . . immunity to

the fullest extent permitted by the laws of [the] jurisdiction,”

served as an “affirmative[] pledge[] not to assert . . .

immunity in proceedings to enforce the Judgment.” 473 F.3d 463,

481 n.19 (2d Cir. 2007). The Court of Appeals reasoned that the

waiver and pledge were coextensive and were to be read alongside

the FSIA, which allows for “execution against a foreign state's

property only if the property is eligible for attachment under a

specific provision of the FSIA.” Id. (emphasis added). Thus,

both waiver and commercial activity in the United States were

required because “[t]o conclude otherwise would render

meaningless the provisions of §§ 1610(a) & (d), which subject to

attachment property of a foreign state when the property is

‘used for a commercial activity’ and when the foreign state ‘has

waived its immunity from attachment.’” Id. (quoting 28 U.S.C.

§ 1610(a)(1)); see also Conn. Bank of Com. v. Republic of Congo,

309 F.3d 240, 247 (5th Cir. 2002) (“[I]f a foreign sovereign

waives its immunity from execution, U.S. courts may execute

against 'property in the United States . . . used for a

commercial activity in the United States.' 28 U.S.C.

§ 1610(a)(1). Even when a foreign state completely waives its

immunity from execution, courts in the U.S. may execute only

against property that meets these two statutory criteria.”).

The Court of Appeals also declined to consider “what remedy, if

any, a judgment creditor might have against a foreign state that

violated an explicit promise not to assert any of the non-

waivable protections of the FSIA in attachment proceedings,

because the Republic did not make any such promise to

plaintiffs.” EM Ltd., 473 F.3d at 481 n.19.

Bainbridge attempts to distinguish this holding by arguing

that the Court of Appeals did not focus on the precise words

that Bainbridge identifies, the Republic’s “consent[] generally

for the purposes of the [FSIA] to the giving of any relief . . .

in connection with any . . . Related Judgment.” (Specimen Note

at 12.)1 Bainbridge contends that while the Court of Appeals in

EM Ltd. found that the Republic’s promise “not to assert

sovereign immunity and its waiver of sovereign immunity ‘to the

fullest extent permitted by the laws of the jurisdiction’ [were]

coextensive” with each other, the Republic’s consent to “the

giving of any relief with relation to a judgment under the FSIA

. . . is obviously not coextensive.” (Dkt. no. 66 at 6-7

(quoting EM Ltd., 473 F.3d at 481 n.19).) Bainbridge argues

that the language cabining the waiver and promise not to assert

sovereign immunity to the “fullest extent permitted” does not

apply to the promise to give “any relief with relation to a

judgment under the FSIA.” Id.

The Court is unpersuaded. The Court of Appeals had the

entire waiver before it and even quoted the exact language

Bainbridge latches onto as dispositive here. EM Ltd., 473 F.3d

at 468 (“The Republic also ‘consent[ed] generally for the

purposes of the Foreign Sovereign Immunities Act to the giving

1 Bainbridge also incorrectly characterizes the EM Ltd. waiver

holding as dicta. EM Ltd. held that the asset at issue was

immune from execution because it did not satisfy the commercial

activity requirement. A necessary predicate to this disposition

of the case was a holding that the commercial activity

requirement still applied. In any event, the purported “dicta”

is highly persuasive, as it gives effect to all provisions of 28

U.S.C. section 1610.

of any relief or the issue of any process in connection with any

Related Proceeding or Related Judgment . . . .’”). Though it

did not reference this language in immediate proximity to its

discussion of the continued applicability of the commercial

activity requirement, the Court of Appeals unambiguously found

that the Republic “did not make any . . . promise” “not to

assert any of the non-waivable protections of the FSIA” based on

its review of the waivers. Id. at 481 n.19. It is unclear how

this Court, based on the same language, can conclude otherwise

and find that the Republic did make that explicit promise.

However, even assuming that Bainbridge’s argument is only

the sibling, and not the twin, of the argument the Court of

Appeals rejected in EM Ltd., the Court of Appeals’ reasoning

leads to the same result for several reasons. First, the Court

of Appeals’ decision, including its reference to the commercial

activity “protections of the FSIA” as “non-waivable,” suggests

that it may not be possible to contract around the commercial

activity requirements of the FSIA. Id. Second, the Court of

Appeals rejected the argument in EM Ltd. because the waiver and

the agreement not to claim immunity were both limited to the

“extent permitted under the laws of the jurisdiction,” and,

consequently, the separate statutory requirements of the FSIA

remained intact. Id. Similarly, the Specimen Note provides

that the Republic “consents generally for the purposes of the

[FSIA] to the giving of any relief,” clearly incorporating the

FSIA into the consent. (Specimen Note at 12 (emphasis added).)

Thus, the best reading is that this provision too remains

cabined by the statutory requirements of the FSIA. Third, even

if the consent could be construed as an implied promise not to

assert a defense based on the other statutory requirements of

the FSIA, it is certainly not “an explicit promise not to assert

any of the non-waivable protections of the FSIA in attachment

proceedings.” EM Ltd., 473 F.3d at 481 n.19 (emphasis added).

Thus, the Court finds that the FSIA’s statutory requirement

that the asset be “used for a commercial activity in the United

States,” 28 U.S.C. § 1610(a), applies and the Republic’s assets

are immune from execution unless they satisfy this requirement.

b. Bainbridge has not Satisfied its Burden of

Demonstrating that the Assets Were Used for

Commercial Activity in the United States

“A defendant seeking to invoke the FSIA's protections must

make a prima facie showing that it is a foreign sovereign.”

Beierwaltes v. L'Office Federale de la Culture de la

Confederation Suisse (Fed. Office of Culture of the Swiss

Confederation), 999 F.3d 808, 816 (2d Cir. 2021) (citing Rukoro

v. Fed. Republic of Ger., 976 F.3d 218, 224 (2d Cir. 2020)).

There is, and can be, no dispute that the Republic is a foreign

sovereign. Thus, the burden shifts to Bainbridge to

“demonstrat[e] that an exception to foreign sovereign immunity

applies.” Id. It is only if Bainbridge meets “its initial

burden of production,” by showing that the assets were used for

commercial activity in the United States, that the burden shifts

back to the Republic to prove “by a preponderance of the

evidence” that the exception does not apply. Id. at 817.2

The Republic argues that Bainbridge has not shown that the

relevant assets were used for commercial activities in the

United States. (Dkt. no. 62 at 13-15.) The Court agrees.

Indeed, the Court cannot engage in the proper analysis pursuant

to either CPLR 5225 or 28 U.S.C. section 1610(a) because

Bainbridge has not identified any specific asset at all.

Instead, Bainbridge has identified “International reserves” and

2 The cited cases, and all the cases the Court could locate in

this Circuit, discuss the standard of proof for sovereign

immunity from suit, as opposed to sovereign immunity from

execution. However, the D.C. and Ninth Circuit Courts of

Appeals agree that the standard and burden shifting are the same

in the execution context. See FG Hemisphere Assocs. v.

Democratic Republic of Congo, 447 F.3d 835, 842 (D.C. Cir. 2006)

(applying same standard and burden shifting regime in evaluating

execution immunity); Peterson v. Islamic Republic of Iran, 627

F.3d 1117, 1128 (9th Cir. 2010) (“holding that the burden-

shifting approach to foreign sovereign immunity from suit also

applies to immunity from execution”). The Court agrees that

this is the appropriate standard, as it provides at least as

much protection to the sovereign’s property as to the sovereign

itself. Walters v. Indus. & Com. Bank of China, Ltd., 651 F.3d

280, 289 (2d Cir. 2011) (“the execution immunity afforded

sovereign property is broader than the jurisdictional immunity

afforded the sovereign itself” because of the “greater affront”

to sovereignty involved in “executi[ng] against a foreign

state's property” as opposed to “merely permitting jurisdiction

over the merits of an action”).

“Government deposits” from the Republic’s central bank’s balance

sheet as set out in the Republic’s 18-K, filed with the SEC on

November 1, 2021. (Dkt. no. 52 at 3-4.) This is the extent to

which Bainbridge has identified the assets that it asks the

Court to order turned over:

Central Bank Balance Sheet

(in millions of pesos, unless otherwise specified)

As of December 31,

2016 2017 2018 2019 2020)

Assets

International reserves:

Gold Ps. 33,313 Ps. 43,158 Ps. 85,281 160,786 Ps. 316,238

Foreign currency 368,453 619,326 1,658,318 1,740,554 2,303,362

Placements of foreign currency 207,294 376,347 760,307 786,790 696,428

Other(1) 5,479 (5,215) (16.658) (1,939) (1,803)

Total international

reserves(2) 614,538 1,033,615 2,487,248 2,686,192 3,314,235

xk k *

Deposits: — — — TT □

Government deposits 18,726 37,029 527,210 50,258 68,849

(Dkt. no. 53-5 at D-100.) This is simply not enough.

Under CPLR 5225, “a judgment creditor seeking a turnover

order must identify the particular property as to which it seeks

a turnover, whether a specific bank account, account receivable,

or office furniture.” Bernard v. Lombardo, 2016 U.S. Dist.

LEXIS 177620, at *4 (S.D.N.Y. Nov. 23, 2016). A judgment

creditor may not simply demand that a judgment debtor turn over

“funds sufficient to pay the Judgment in full, or alternatively

to turn over to plaintiffs all property, including their out-of-

18

state property, sufficient to pay the Judgment.” Id. Courts in

this Circuit have thus repeatedly denied motions pursuant to

CPLR 5225 that are “directed at a defendant's assets generally”

as opposed “to specific pieces of property.” Jalbert v. Flom

(In re BICOM NY, LLC), No. 19-01315 (MEW), 2021 Bankr. LEXIS

2669, at *13 (Bankr. S.D.N.Y. Sept. 29, 2021) (collecting

cases).

Similarly, in order to perform the requisite analysis under

28 U.S.C. section 1610(a), the judgment creditor must identify

“the specific accounts or funds . . . upon which they seek to

execute judgment.” Walters v. Indus. & Com. Bank of China,

Ltd., 651 F.3d 280, 297 (2d Cir. 2011). As with CPLR 5225, the

party seeking to execute against a sovereign’s assets under

section 1610 may not simply seek “to attach and execute against

the assets” “wherever the same may be located, which are

beneficially owned” by the sovereign. Olympic Chartering v.

Ministry of Indus. & Trade of Jordan, 134 F. Supp. 2d 528, 536

(S.D.N.Y. 2000). Instead, the request must “specifically

indicate which funds the plaintiff seeks to attach” because when

the specific asset is not identified, “the Court cannot

adequately review the propriety of attaching the assets of the

judgment-debtor.” Id.; see also Funnekotter v. Republic of

Zim., 2011 U.S. Dist. LEXIS 14915, at *6-7 (S.D.N.Y. Feb. 10,

2011) (denying turnover motion where “Petitioners have not

identified the specific property owned by the Entities that is

located in the United States and used for a commercial activity”

and failed to “submit[] evidence from which to adduce that the

Entities have property in the United States and that such

property is used for a commercial activity”).

Bainbridge effectively asks the Court to order the Republic

to bring in sufficient assets from Argentina to the United

States without identifying the specific assets it wishes to have

turned over. Bainbridge has done nothing more than identify

funds, with no level of specificity, on a balance sheet in a

publicly filed form and cited to various sections of the same

form describing in extremely general terms how some of the funds

may have been used. What Bainbridge has not done is identify

the specific accounts in which the funds are held and provide

the Court with evidence specific to those accounts that would

allow the Court to perform the necessary analysis under CPLR

5225 and 28 U.S.C. sections 1610(a) and 1611, such as account-

specific evidence regarding the entity that owns or controls

those specific accounts, how each specific account has

functioned, how the funds in each specific account have been

used, etc.3

3 For the same reasons that the Court cannot adequately analyze

the commercial activity exception under 28 U.S.C. section 1610,

the Court cannot determine whether, as the Republic asserts, 28

U.S.C. section 1611 applies to some or all of the funds.

Without evidence going to the ownership and function of the

accounts, Bainbridge has not satisfied its burden of

demonstrating that an exception to execution immunity applies.

Bainbridge cannot “shift the burden of identifying specific,

recoverable assets onto” the Republic in the first instance,

Walters, 651 F.3d at 297, or claim that the Republic’s “silence”

is sufficient to imply the necessary commercial activity (Dkt.

no. 66 at 9-10). The Republic has the ultimate burden of

persuasion, but Bainbridge has not yet met “its initial burden

of production,” Beierwaltes, 999 F.3d at 816-17, because it has

identified general funds and deposits instead of specific assets

and therefore has necessarily failed to show that any specific

asset is excepted from execution immunity. The Court cannot

order turnover on this record. Bainbridge must “exhaust[] [its]

powers of discovery pertaining to the judgment debtor's assets,”

Walters, 651 F.3d at 297, and “identif[y] the property on which

[it] seek[s] to execute,” Funnekotter, 2011 U.S. Dist. LEXIS

14915, at *8.

D. Conclusion

Bainbridge asks the Court to order a sovereign to bring

assets held in that sovereign country’s central bank and deliver

them to New York. The Court has found it has the power to do

so. But Bainbridge must provide the evidentiary basis for doing

so before the Court can exercise that power. Bainbridge’s

motion is therefore DENIED without prejudice to renewal if, and

when, it can do so.

The Clerk of the Court shall close the open motion at dkt.

no. 51.

SO ORDERED.

Dated: September 6, 2023

New York, New York

LORETTA A, PRESKA

Senior United States District Judge

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