Argentina's deadbeat government found in contempt of court

Reuters/Guardian:
Argentina is in contempt of court, a US judge ruled on Monday, the latest step in a years-old case brought by US hedge funds over defaulted debt.

US judge Thomas Griesa in New York held off on any decision on fines or sanctions against the South American country, which in July fell into its second sovereign default in 12 years and has long been at odds with Griesa’s decisions and adopted a law aimed at evading them.

“The problem is that the republic of Argentina has been and is now taking steps in an attempt to evade critical parts” of the order, Griesa said during a hearing in his lower Manhattan courtroom.

Argentina defaulted in 2002 and missed a bond coupon payment in late July after Griesa ruled it could not be made unless the country also paid more than $1.3vb to a group of US funds that rejected previous bond restructurings and are demanding full repayment.

Argentina said earlier on Monday that a contempt order from Griesa would violate international law.

Argentina defaulted in 2002 and missed a bond coupon payment in late July after Griesa ruled it could not be made unless the country also paid more than $1.3bn to a group of US funds that rejected previous bond restructurings and are demanding full repayment.

It was not clear whether the order would have any practical impact on a populist government that regularly condemns the funds as “vultures” and has shown itself willing to defy Griesa’s rulings.

Plaintiff bondholders, led by Elliott Management Corp’s NML Capital Ltd and Aurelius Capital Management, have urged Griesa to consider unspecified non-monetary sanctions that could push the country to comply.

Those sanctions might, for instance, include barring Argentina from doing business with US banks, though such a ruling would likely engender fresh litigation over whether Griesa has the authority to do so.

NML and Aurelius renewed their request for a contempt finding last week, citing the 11 September passage of a new law allowing a swap of previously restructured debt for bonds payable in Argentina under its local laws.
...
A fine against a dead beat is unlikely to get you anywhere so they will need to find another way of dealing with Argentina and its government of thieves.  I am not sure any US banks would want to deal with Argentina at this point.  I think a travel ban on government officials might be troubling for them.  What seems pretty clear is that it will be very difficult for Argentina to restructure its debt without complying with this court.

Comments

Popular posts from this blog

Should Republicans go ahead and add Supreme Court Justices to head off Democrats

29 % of companies say they are unlikely to keep insurance after Obamacare

Bin Laden's concern about Zarqawi's remains