Argentina fights US order to pay $1.33 billion debt

The Economic and Finance Minister of Argentina, Hernán Lorenzino, held a press conference Nov. 22 indicating Argentina’s intent to appeal a US judge’s ruling ordering it to pay $1.33 billion to bondholders. District Judge Thomas Griesa for the US District Court for the Southern District of New York in his decision stated that “Argentina must pay the debts it owes.” Lorenzino, in response to the ruling, stated during the press conference that the ruling was unfair and that Argentina will seek any and all methods to protect the country’s interest. In addition, Lorenzino indicated that Argentina will appeal the ruling to the US Supreme Court if necessary and is willing to resort to any international body available.

The US Court of Appeals for the Second Circuit in October ruled that Argentina must pay $1.33 billion to bondholders when it repays its debts stemming from an economic collapse in 2001. The Second Circuit affirmed a district court ruling that Argentina breached a promise when it prioritized paying holders of its restructured debt over the bondholders who held its defaulted debt. In August the Second Circuit rejected Argentina’s attempt to prevent bondholders from acquiring bank documents regarding the country’s assets outside US territory, declaring that sovereign immunity was not an acceptable defense in this case. In September 2011 the US District Court for the Southern District of New York ruled that Argentina had to comply with subpoenas requested by NML Capital Ltd., one of the bondholders of Argentina’s debts, for the collection of five money judgments totaling about $1.6 billion.

From Jurist, Nov. 23. Used with permission.

  1. Appeals court suspends order for Argentina to pay creditors
    The US Court of Appeals for the Second Circuit on Nov. 28 stayed a lower court ruling that would have forced Argentina to pay $1.3 billion to one of its creditors, the investment fund NML Capital Ltd. The Second Circuit blocked a decision by the US District Court for the Southern District of New York that ordered Argentina’s government to pay the $1.3 billion into an escrow account by Dec. 15. Last week Argentina appealed the district court’s decision, saying that it was unfair. Argentine President Cristina Fernandez de Kirchner  called the district court’s ruling “judicial colonialism” and refused to pay the debt to NML Capital. The Second Circuit has scheduled oral arguments for Feb. 27.

    From Jurist, Nov. 29. Used with permission.