S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5290--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               March 7, 2023
                                ___________
 
 Introduced  by  M. of A. GONZALEZ-ROJAS, DAVILA, SIMONE, BURGOS, WEPRIN,
   EPSTEIN, FAHY, REYES,  SHIMSKY,  GALLAGHER,  THIELE,  SEPTIMO,  LUCAS,
   SHRESTHA,  L. ROSENTHAL,  RAGA,  DE LOS SANTOS, SIMON, MEEKS, BURDICK,
   MAGNARELLI, DICKENS, KELLES, HYNDMAN, STECK, ROZIC, LEE,  MITAYNES  --
   read once and referred to the Committee on Judiciary -- recommitted to
   the  Committee on Judiciary in accordance with Assembly Rule 3, sec. 2
   -- committee discharged, bill amended, ordered  reprinted  as  amended
   and recommitted to said committee
 
 AN  ACT to amend the judiciary law and the civil practice law and rules,
   in relation to the purchase of claims by  corporations  or  collection
   agencies  and to certain instruments calling for payment of a monetary
   obligation by a foreign state
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Legislative intent. The intended purpose of this act is to
 restore the champerty defense in  sovereign  debt  lawsuits  for  claims
 greater than $500,000 with respect to suits brought by litigious holdout
 investors.  The restoration is not intended to apply to conventional and
 generally cooperative investors who  may  occasionally  choose  to  sue,
 where "conventional investors" includes investors that regularly buy and
 hold  sovereign  debt  purchased  in the primary market and "cooperative
 investors" includes distressed debt investors  that  regularly  purchase
 debt at a discount in the secondary market and have a record of support-
 ing the consensual resolution of sovereign debt distress through serving
 as  a  member  of  creditor  committees or by generally participating in
 transactions accepted by other creditors following a negotiation.
   § 2. Subdivision 2 of section 489 of the judiciary law,  as  added  by
 chapter 394 of the laws of 2004, is amended to read as follows:
   2.  Except  as  set  forth  in  subdivision three of this section, the
 provisions of subdivision one of this section shall  not  apply  to  any
 assignment,  purchase  or  transfer hereafter made of one or more bonds,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08948-09-4
              

 A. 5290--A                          2
 
 promissory notes, bills of exchange, book  debts,  or  other  things  in
 action, or any claims or demands, if such assignment, purchase or trans-
 fer  included  bonds,  promissory  notes,  bills of exchange and/or book
 debts,  issued  by  or  enforceable  against  the  same ELIGIBLE obligor
 (whether or not also issued by or enforceable against any other ELIGIBLE
 obligors), having an aggregate purchase price of at least  five  hundred
 thousand dollars, in which event the exemption provided by this subdivi-
 sion  shall  apply as well to all other items, including other things in
 action, claims and demands, included in  such  assignment,  purchase  or
 transfer  (but  only  if  such  other items are issued by or enforceable
 against the same ELIGIBLE obligor, or relate to or arise  in  connection
 with  such  bonds, promissory notes, bills of exchange and/or book debts
 or the issuance thereof).   FOR THE PURPOSES OF  THIS  SUBDIVISION,  THE
 TERM  "ELIGIBLE  OBLIGOR" MEANS AN OBLIGOR OTHER THAN (I) THE GOVERNMENT
 OF ANY FOREIGN COUNTRY OR OF ANY  POLITICAL  SUBDIVISION  OF  A  FOREIGN
 COUNTRY,  OR  (II) AN ISSUER OF A BOND, LOAN, OR DEBT INSTRUMENT GUARAN-
 TEED BY THE GOVERNMENT OF ANY FOREIGN COUNTRY OR OF ANY POLITICAL SUBDI-
 VISION OF A FOREIGN COUNTRY.
   § 3. Section 489 of the judiciary law  is  amended  by  adding  a  new
 subdivision 4 to read as follows:
   4.  FOR  PURPOSES  OF  SUBDIVISION  ONE OF THIS SECTION, AN ASSIGNEE'S
 INTENT AND PURPOSE IN TAKING AN ASSIGNMENT OF A CLAIM AGAINST AN OBLIGOR
 THAT IS NOT AN ELIGIBLE OBLIGOR MAY BE INFERRED FROM THE HISTORY OF  THE
 ASSIGNEE'S  (AND ITS AFFILIATES') BEHAVIOR IN TRANSACTIONS INVOLVING THE
 DEBTS OF OTHER OBLIGORS INCLUDING, BUT  NOT  LIMITED  TO,  WHETHER  THAT
 HISTORY  INDICATES  A  PATTERN OF EITHER (A) PARTICIPATING IN GOOD FAITH
 ALONGSIDE OTHER CREDITORS IN CONSENSUAL RESOLUTIONS OF  SUCH  SITUATIONS
 OR  (B) ACQUIRING CLAIMS AGAINST SUCH OBLIGORS AT A SIGNIFICANT DISCOUNT
 FROM FACE VALUE, REFUSING TO  PARTICIPATE  IN  CONSENSUAL  WORKOUTS  AND
 INSTEAD  RESORTING  TO LEGAL ENFORCEMENT OF THE ACQUIRED CLAIMS. A COURT
 SHALL CONSIDER SUCH OTHER FACTS AND CIRCUMSTANCES RELATED TO THE  ACQUI-
 SITION  OF  THE  CLAIMS OR THE ASSIGNEE'S OVERALL BUSINESS ACTIVITIES IN
 THE DEBT OF ANY GOVERNMENT OR POLITICAL SUBDIVISION OF A FOREIGN COUNTRY
 AS IT MAY FIND RELEVANT IN ASSESSING THE ASSIGNEE'S INTENT AND PURPOSE.
   § 4. Section 5004 of the civil practice law and rules, as  amended  by
 chapter 831 of the laws of 2021, is amended to read as follows:
   §  5004.  Rate  of interest. (a) Interest shall be at the rate of nine
 per centum per  annum,  except  where  otherwise  provided  by  statute;
 provided the annual rate of interest to be paid in an action arising out
 of  a  consumer  debt where a natural person is a defendant shall be two
 per centum per annum (i) on a judgment or accrued  claim  for  judgments
 entered  on or after the effective date of [the] chapter 831 of the laws
 of two thousand twenty-one [which amended this section],  and  (ii)  for
 interest upon a judgment pursuant to section five thousand three of this
 article from the date of the entry of judgment on any part of a judgment
 entered  before  the  effective date of [the] chapter 831 of the laws of
 two thousand twenty-one [which amended this section] that is  unpaid  as
 of such effective date.
   (b)  FOR  ACTIONS  OR  PROCEEDINGS  COMMENCED AFTER MAY FIFTEENTH, TWO
 THOUSAND TWENTY-FOUR, EXCLUDING ACTIONS OR PROCEEDINGS WITH  RESPECT  TO
 PAYMENT  DEFAULTS THAT OCCURRED BEFORE MAY FIFTEENTH, TWO THOUSAND TWEN-
 TY-FOUR, THE ANNUAL RATE OF INTEREST TO BE PAID IN AN ACTION ARISING OUT
 OF A CLAIM AGAINST (I) A  GOVERNMENT OF ANY FOREIGN COUNTRY  OR  OF  ANY
 POLITICAL SUBDIVISION OF A FOREIGN COUNTRY, OR (II) AN ISSUER OF A BOND,
 LOAN,   OR DEBT INSTRUMENT  GUARANTEED  BY THE GOVERNMENT OF ANY FOREIGN
 COUNTRY OR OF ANY POLITICAL  SUBDIVISION  OF  A  FOREIGN  COUNTRY  AS  A
 A. 5290--A                          3
 
 DEFENDANT SHALL BE EQUAL TO THE WEEKLY AVERAGE ONE-YEAR CONSTANT MATURI-
 TY TREASURY YIELD, AS PUBLISHED BY THE BOARD OF GOVERNORS OF THE FEDERAL
 RESERVE  SYSTEM,  FOR  THE CALENDAR WEEK PROCEEDING THE DATE OF ENTRY OF
 THE  JUDGMENT AWARDING DAMAGES (28 U.S.C. §1961(A)).  FOR THE PURPOSE OF
 THIS SUBDIVISION, A "CLAIM AGAINST A  FOREIGN  STATE"  MEANS  A  PAYMENT
 CLAIM AGAINST A FOREIGN STATE FOR  MONIES BORROWED  OR FOR  THE  FOREIGN
 STATE'S   GUARANTEE  OF,  OR  OTHER  CONTINGENT  OBLIGATION  ON,  MONIES
 BORROWED; THE TERM "MONIES BORROWED" SHALL INCLUDE THE FOLLOWING, WHETH-
 ER OR NOT IT  REPRESENTS  THE   BORROWING   OF   MONEY:   MONIES   OWING
 UNDER BONDS; DEBENTURES; NOTES, OR SIMILAR INSTRUMENTS OF ORIGINAL MATU-
 RITY  OF  AT  LEAST  ONE YEAR; MONIES OWING  FOR  THE  DEFERRED PURCHASE
 PRICE OF PROPERTY OR SERVICES, OTHER THAN TRADE ACCOUNTS PAYABLE ARISING
 IN THE ORDINARY  COURSE  OF   GOVERNMENT   OPERATIONS; MONIES  OWING  ON
 CAPITALIZED  LEASE  OBLIGATIONS;  MONIES  OWING  ON  OR  WITH RESPECT TO
 LETTERS OF CREDIT, BANKERS' ACCEPTANCES, OR OTHER EXTENSIONS  OF  CREDIT
 OF ORIGINAL MATURITY OF AT LEAST ONE YEAR.
   (C)  For  the  purpose of this section "consumer debt" means any obli-
 gation or alleged obligation of any natural person to pay money  arising
 out of a transaction in which the money, property, insurance or services
 which  are  the  subject  of the transaction are primarily for personal,
 family or household purposes, whether or not such  obligation  has  been
 reduced  to  judgment,  including, but not limited to, a consumer credit
 transaction, as defined in subdivision (f) of section one  hundred  five
 of this chapter.
   [(c)]  (D)  This section does not affect or create any rights or reme-
 dies related to any amounts paid prior to the  effective  date  of  this
 subdivision,  including  amounts paid to satisfy judgments or to accrued
 interest or fees paid, or with respect to judgments satisfied  prior  to
 the  effective  date  of this subdivision. For amounts paid prior to the
 effective date of this subdivision and lawfully applied in  satisfaction
 or  partial satisfaction of interest or fees accrued prior to the effec-
 tive date of this subdivision, this section shall not  be  construed  to
 require  a  judgment  creditor  or  sheriff to (i) return or refund such
 amounts to judgment debtors; or (ii) apply such payments to satisfy  any
 part  of  a  money  judgment  other  than fees or interest upon judgment
 pursuant to section five thousand three of this article.
   [(d)] (E) If any word, phrase, clause, sentence,  paragraph,  subdivi-
 sion,  or  part  of  this  section  or  its application to any person or
 circumstance is held invalid by  any  court  of  competent  jurisdiction
 after  exhaustion  of  all further judicial review, the invalidity shall
 not affect, impair, or invalidate  the  remainder  of  this  section  or
 applications  of  this  article  which  can  be given effect without the
 invalid provision or application, and to this end the provisions of this
 section are severable.
   § 5. This act shall take effect immediately.