Alliance Bond Fund, Inc. v. Grupo Mexicano de Desarrollo, S.A.
United States Court of Appeals for the Second Circuit
190 F.3d 16 (1999)
- Written by Steven Pacht, JD
Facts
Grupo Mexicano de Desarrollo, S.A. (Grupo) was a construction company that built toll roads in Mexico for private concessionaires. Upon Grupo’s default, Alliance Bond Fund, Inc. and other holders (collectively, noteholders) (plaintiffs) of Grupo-issued notes sued Grupo and others seeking unpaid principal and interest. The Mexican government subsequently took control of Mexico’s toll roads and promised to pay the noteholders. However, there was no guarantee that the Mexican government would honor this payment commitment. The district court awarded summary judgment to the noteholders in the amount of more than $82 million and issued a turnover order requiring that Grupo assign or transfer to the noteholders a sufficient amount of toll receivables or government notes to satisfy the judgment. Grupo appealed, arguing that (1) under Civil Practice Law and Rules (CPLR) § 5201, the receivables and government notes were not debt or property that could be used to satisfy the noteholders’ judgment and (2) Grupo could not produce the money that the Mexican government promised to pay. The noteholders responded, among other things, that the turnover order could be affirmed with respect to at least the toll-road receivables pursuant to the New York Court of Appeals’ decision in ABKCO Industries, Inc. v. Apple Films, Inc.
Rule of Law
Issue
Holding and Reasoning (Jacobs, J.)
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