In 2005, Fir Tree Capital Opportunity Master Fund, LP and Fir Tree Value Master Fund, LP (the Funds) purchased $200 million in notes from Anglo Irish Bank Corporation Limited (the Bank) pursuant to a note purchase agreement (NPA). The NPA provided that the notes were payable in New York and that New York law governed. The Bank was incorporated under the laws of the Republic of Ireland.

In an effort to stabilize the nation's banking system and prevent the nation's collapse after the 2008 financial crisis, the Irish government nationalized the Bank in January 2009, thereby becoming its sole owner. The Republic of Ireland did not, however, become a party to the NPA. After nationalization, the Bank started liquidating its assets at discounts of 54% to 66%. In December 2009, the Irish government enacted a law that allowed the Bank to sell qualifying illiquid loans to a government-created body and, in exchange, receive liquid securities guaranteed by the Irish government. During 2010, the Irish government purchased 34 billion in nonperforming loans from the Bank for 13 billion in the government securities. In 2010, the Irish government enacted another law enabling the High Court of Ireland to order the Bank to sell certain of its deposits and assets and begin a plan to merge with another bank (INBS). The Bank then sold 12.2 billion of the securities at a discount to yet another bank.

The Funds sued in New York, alleging that these actions caused the Bank to breach certain provisions of the NPA. The Funds sought a preliminary injunction enjoining the Bank from merging and disposing of its assets, requiring the Bank to leave $200 million in the United States, and appointing a receiver to take charge of the Bank's U.S.-based assets. The Bank moved to dismiss the suit, arguing that the Foreign Sovereign Immunities Act (FSIA) provided it with immunity. The Funds argued that the commercial activity exception to immunity applied. Should the suit be dismissed? Is there anything the Funds could have done to protect themselves against nationalization by the Irish government? [Fir Tree Capital Opportunity Master Fund, LP v. Anglo Irish Bank Corp. Ltd., 2011 WL 6187077 (S.D.N.Y. Nov. 28, 2011).