NY S01477

Restores the champerty defense in sovereign debt lawsuits for claims over $500,000 brought by "litigious holdout investors" who buy distressed foreign government debt and refuse to participate in cooperative debt restructurings

Excludes foreign governments and their political subdivisions from the existing exemption to champerty rules, meaning debt claims against foreign sovereigns can now be challenged as improperly purchased for litigation purposes

Allows courts to infer an assignee's intent to sue by examining their history of either participating in good faith debt workouts or repeatedly acquiring discounted claims and refusing consensual resolutions

Reduces the post-judgment interest rate on claims against foreign governments from 9% to the federal one-year Treasury yield rate (approximately 4-5%), applicable to actions filed after May 15, 2024 for defaults occurring after that date

Targets "vulture funds" that purchase sovereign debt at steep discounts and pursue aggressive litigation rather than participating in multilateral debt restructuring negotiations