Senate approves measure to limit so-called 'vulture fund' litigation over sovereign debt, 36-22

The New York State Senate on June 3 passed legislation intended to deter opportunistic litigation by certain investors in sovereign and other sovereign-related debt, voting 36 in favor and 22 opposed.

The bill, sponsored by Senator Liz Krueger and carried on the floor as calendar 1474 (senate print 14777), would restore a champerty-style defense in New York courts that backers say will limit litigation brought by investors who bought distressed sovereign debt primarily to sue. Senator Krueger told colleagues the change is meant to “deter wasteful disruptive litigation in the courts of New York State brought by investors seeking to game the sovereign crisis resolution process for their own personal profit.”

Supporters said the measure will protect orderly debt…