Thomas Lee was quoted in a Law360 piece about the Second Circuit’s decision that the Banco Central de la Republica Argentina is not the country’s alter ego.
Experts who spoke with Law360 said the Second Circuit got the decision right and applied the Supreme Court’s so-called Bancec rule correctly. It’s the first time the Second Circuit has ruled in Argentina’s favor during the protracted litigation over the country’s debt, said Fordham University law professor Thomas Lee.
Even if Argentina exerts a greater amount of control over BCRA than the U.S. exerts over the Federal Reserve, it isn’t enough to establish BCRA is an alter ego of the government, Lee said. It’s on the hedge funds to establish that BCRA does whatever the government tells it — like a puppet — but the allegations in the complaint don’t go that far, he said.
“You have to satisfy a very high bar to make an alter ego allegation,” Lee said. “As I explain to my students, you have to allege the other thing is a puppet and you’re a ventriloquist. It’s not easy to do.”