Academic journal article Defense Counsel Journal

Allegation of Champerty Doesn't Pierce Privilege

Academic journal article Defense Counsel Journal

Allegation of Champerty Doesn't Pierce Privilege

Article excerpt

Charging its opposing litigant with champerty didn't do the Republic of Peru and its Banco de la Nacion much good in trying to pry information from a lawyer who has represented clients in sovereign debt collections against South American countries. The U.S. District Court for the Southern District of New York denied most of Peru's request to question the lawyer.

Peru restructured its debt in 1983 by "letter agreement" assignments to Swiss and Netherlands banks. Elliott Associates L.P., a Delaware limited partnership, acquired part of the debt. Peru purported to restrict assignments of the debt to "financial institutions," and it claimed Elliott was not such an animal. Peru's theory was that if Elliott knew it would not be classified as a "financial institution," it's only method of collection would be litigation. Therefore, the theory continued, Peru could interrogate Michael Straus, the lawyer who represented Elliott in a suit in New York on the debt, because Elliott was guilty to champerty, which was being asserted as a defense, and Straus could not hide behind the attorney-client privilege.

Peru wanted to question Straus as to whether and when he first advised Elliott regarding the assignment agreements, which information, Peru claimed, was relevant to show that Straus's experience in suing sovereign debtors was integral to Elliott's investment strategy. …

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