Bill > A00643

This bill addresses legal procedures related to purchasing claims from foreign entities, specifically targeting what are known as "holdout investors" in sovereign debt lawsuits. The legislation restores and modifies the "champerty defense" (a legal doctrine preventing speculative litigation) for claims over $500,000 against foreign governments or entities. The bill defines two key categories of investors: "conventional investors" (those who regularly buy and hold sovereign debt in primary markets) and "cooperative investors" (distressed debt investors who typically support consensual debt resolution). It amends existing law to limit how non-eligible obligors (specifically foreign governments or their guaranteed debt issuers) can be pursued in legal claims. The bill introduces new criteria for courts to evaluate an assignee's intent when purchasing claims, considering factors like the assignee's historical behavior in debt transactions, such as whether they participate in good faith negotiations or aggressively pursue legal enforcement. Additionally, the bill modifies interest rate calculations for judgments involving foreign state claims, tying the rate to the Federal Reserve's weekly average one-year constant maturity treasury yield. The legislation aims to discourage predatory debt collection practices while preserving legitimate investment and debt resolution mechanisms.

Justice

https://www.nysenate.gov/legislation/bills/2025/A643