Ajdler v. Province of Mendoza

The Court of Appeals accepted a question certified to it by the federal court of appeals and answered that, pursuant to the Court’s Rule 500.27, if a bond issuer remains obligated to make biannual interest payments until the principal is paid, including after the date of maturity, enforceable claims for such biannual interest do not continue to accrue after a claim for principal of the bonds is time-barred.In 1997, Defendant, the Province of Mendoza, issued bonds valued at $250 million. Plaintiff Moshe Marcel Ajdler was the beneficial owner of $7,050,000 of the principal amount. Plaintiff did not receive any scheduled interest payments or payment of his share of his principal on the maturity date. In 2017, Plaintiff brought this action seeking to collect his share of principal and interest payments to which he was entitled. The district court granted Defendant’s motion to dismiss, concluding that all claims for principal and any accrued interest were time-barred. The Second District concluded that Plaintiff’s claim for principal was untimely but certified questions as to the viability of Plaintiff’s claims to recover interest. The Court of Appeals held that in the absence of a timely action to recover principal, a bondholder cannot enforce the conditional obligation to make post-maturity interest payments. View "Ajdler v. Province of Mendoza" on Justia Law