By Rodrigo Campos
NEW YORK, June 3 (Reuters) – New York State lawmakers must decide by the end of this week whether to advance a bill that would alter state law tied to foreign sovereign debt, setting up a late-session test for legislation closely watched by investors and debt-relief advocates.
Hundreds of billions of dollars in sovereign debt could be affected, as New York law governs over 50% of sovereign bonds globally. Changes to state statutes can directly affect how restructurings unfold and how much holdout creditors can recover.
The bill, known by supporters as the Champerty Fix Act, cleared the state Senate on Tuesday and was sent to the Assembly, where its path remains uncertain, as there is still no assurance from leadership to move the bill along, according to its sponsors.
“We haven’t gotten express commitments, but we have been having really positive conversations, and we have a lot of support amongst members of the assembly, so we’re really pushing to get it over the finish line,” Assembly bill sponsor Jessica Gonzalez-Rojas told Reuters. “We’ve really got to a place where we have a very clean and elegant bill that really targets the bad actors.”
Financial industry and business groups including SIFMA, the MFA and the Creditor Rights Coalition oppose the proposal, saying it would damage New York’s role as a financial and legal center.
Gonzalez-Rojas said she had a “positive discussion” with the Business Council of New York State, which also opposed the move. “I think we’ve neutralized a lot of the concerns,” she said.
Lawmakers are scheduled to adjourn on Thursday, though the Albany session could be extended. A similar bill cleared the Senate last year and died in the Assembly.
The measure would amend New York’s champerty law, which restricts the purchase of claims for the purpose of filing lawsuits, and apply it to certain claims involving debt issued or guaranteed by foreign governments. It would also lower the interest rate that accrues on some judgments against foreign sovereign borrowers.
Supporters say the bill would deter investors from buying distressed-country debt at steep discounts and then suing for full repayment, a strategy they say can complicate sovereign debt restructurings and drain money from countries already in crisis.
“Because so much of the world’s sovereign debt is governed by New York law, Albany has a unique responsibility to ensure our legal system isn’t being used to undermine fair debt restructurings,” Jose Gonzalez, senior campaigns director at NY Communities for Change, said in a statement. “We applaud the Senate for advancing this legislation and urge the Assembly to do the same.”
(Reporting by Rodrigo Campos in New York; Editing by Matthew Lewis and Bill Berkrot)
By Rodrigo Campos | Reuters | © Copyright Thomson Reuters 2026.
