Argentina threatened with contempt of court in debt dispute

Bloomberg:

Argentina may be held in contempt of court if the country’s officials don’t stop issuing false and misleading statements about a dispute between two groups of bondholders, said the U.S. judge overseeing the case.

The nation’s lawyers were called into Manhattan federal court yesterday for an emergency hearing after Argentina published full-page ads in the New York Times and the Wall Street Journal the previous day challenging the court’s jurisdiction.

The ads, which said Argentina wants to keep paying its debt but has been prevented by U.S. District Judge Thomas Griesa, misled the public, the judge said. Argentina’s obligations are the same to holders of restructured debt from a 2001 default and investors who rejected the new terms, Griesa said. The judge said he had warned against such false statements just a week ago.

“Surely there will be a cessation of false and misleading statements by the republic,” said Griesa, who has overseen the dispute for more than a decade. “If there is not, it will be necessary to consider contempt of court.”

A series of rulings by Griesa bar Argentina from making interest payments to holders of its restructured debt unless it also pays more than $1.5 billion to a group of hedge funds, led by billionaire Paul Singer’s Elliott Management Corp., that hold the country’s defaulted bonds and filed the lawsuit. Griesa’s order -- and the failure of the two sides to reach a settlement -- led to a second default for the country last month.
...

There is more.

Argentina has an irresponsible government.  It is surprising to me that people still buy their debt.  The country needs to meet its obligations and it better listen to the judge.