Bill > S01477

This bill addresses legal provisions related to purchasing claims, particularly in the context of sovereign debt lawsuits, with a focus on preventing predatory investment practices. The legislation introduces new definitions and restrictions for financial entities purchasing claims, especially those involving foreign governments. Specifically, the bill restores the "champerty defense" for sovereign debt lawsuits involving claims over $500,000, distinguishing between "conventional investors" (who regularly buy and hold debt in primary markets) and more aggressive "litigious holdout investors." The bill amends existing judiciary law to define an "eligible obligor" as excluding foreign governments and their guaranteed debt instruments. It also provides courts with guidelines to assess an assignee's intent when purchasing claims, considering factors like their historical behavior in debt transactions, such as whether they participate in good-faith negotiations or engage in aggressive legal enforcement. Additionally, the bill modifies interest rate calculations for judgments involving foreign state claims, proposing that interest rates be tied to the Federal Reserve's weekly average one-year constant maturity treasury yield, rather than a fixed percentage. The legislation aims to discourage speculative debt purchasing and encourage more cooperative approaches to resolving international financial disputes.

Justice

https://www.nysenate.gov/legislation/bills/2025/S1477