Argentina sees 25 new lawsuits in forced default

GMT 01:40 2014 Saturday ,08 November

Arab Today, arab today Argentina sees 25 new lawsuits in forced default

Lawyer Robert A. Cohen (L)
New York - AFP

Argentina told a New York judge Friday that its court-forced bond default has spurred a raft of new lawsuits against the country, threatening to further tie it up in litigation.
In a letter to Judge Thomas Griesa, whose ruling blocking the country from making a debt payment forced it into default in July,  Buenos Aires complained that the result has been 25 new lawsuits from creditors.
The "practical effect" of Greisa's injunctions on the country servicing its debt to its main creditors, Argentina said, "has become clear since they went into effect this past June. They did not 'end' the litigation."
"The injunctions have had only a negative effect: they have created more litigation."
Griesa had ruled that the country could not make a $539 million interest payment to holders of its restructured bonds on June 30, unless it first pays off a group of "holdouts" who refused to take part in its 2005 and 2010 debt restructurings.
But Argentina has refused to pay the holdouts, led by two US hedge funds which sued the country for full payment on the defaulted Argentine bonds they hold.
In October, the hedge funds assured the court in a letter that other claims on Argentina like their own could be consolidated to make a settlement more easily reached.
In the letter Friday, Argentina said that instead the claims have exploded, from other holdouts and now from holders of restructured bonds, "thereby exacerbating further the situation."
The letter said it had put the country in "an impossible situation".
"There can be no equitable basis for seeking to compel the Republic...  to do the impossible by paying in full its holdout debt, much of which was purchased at a deep discount in the secondary market with the aim of extracting through litigation better terms than the vast majority of the Republic's creditors who participated in the Republic's debt restructuring," it said.
In response, Robert Cohen, a lawyer for NML Capital, one of the two hedge fund "holdouts", suggested in a statement that Buenos Aires was simply continuing to avoid a negotiated settlement over the issue.
"Since June, when the Supreme Court declined to hear its appeal, the government of Argentina has consistently said that it wants to resolve its debt dispute with all of its creditors," he said.
"The motions outlined in our (October) letter to Judge Griesa provide a constructive vehicle to reach that resolution."
The hedge funds maintain that Argentina is stalling to avoid settling with them, which would mean paying $1.6 billion in principal and accrued interest on the bonds they hold.

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