Mass Sovereign Debt Litigation: A Computer-Assisted Analysis of the Argentina Bond Litigation in the U.S. Federal Courts 2002–2016

68 Pages Posted: 18 Jul 2022

See all articles by Gregory Makoff

Gregory Makoff

Centre for International Governance Innovation

Mark C. Weidemaier

University of North Carolina School of Law

Date Written: July 8, 2022

Abstract

This article presents a computer-assisted analysis of the first large-scale mass litigation of sovereign debt claims. Between 2002 and 2016, hundreds of lawsuits were filed against Argentina in the United States, virtually all in the Southern District of New York. Historically, litigation against a foreign government would have involved a few hedge funds that had invested in debt at distressed prices. Argentina faced thousands of investors, including small retail bondholders, in litigation that more closely resembled a mass tort or federal multidistrict litigation than any prior episode involving a sovereign’s debt default.

This article combines traditional analysis of court records with computer-assisted analysis of dockets and hearing transcripts using machine learning techniques. It provides a comprehensive account of the Argentina bond litigation, demonstrating that a wide range of investment funds and even retail investors can finance and aggressively pursue litigation against a foreign state. The article develops metrics to measure the intensity of litigation, shows that a relative handful of cases and litigants generated disproportionate activity, and reveals patterns in how groups of plaintiffs competed and coordinated. The findings suggest that, despite recent reforms designed to reduce litigation, sovereign debt litigation is here to stay.

Keywords: sovereign debt, Argentina

JEL Classification: F34, H63

Suggested Citation

Makoff, Gregory and Weidemaier, Mark C., Mass Sovereign Debt Litigation: A Computer-Assisted Analysis of the Argentina Bond Litigation in the U.S. Federal Courts 2002–2016 (July 8, 2022). UC Davis Law Review, Forthcoming, UNC Legal Studies Research Paper No. 4157688, Available at SSRN: https://ssrn.com/abstract=4157688 or http://dx.doi.org/10.2139/ssrn.4157688

Gregory Makoff

Centre for International Governance Innovation ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2
Canada

Mark C. Weidemaier (Contact Author)

University of North Carolina School of Law ( email )

Van Hecke-Wettach Hall, 160 Ridge Road
CB #3380
Chapel Hill, NC 27599-3380
United States
919.843.4373 (Phone)

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