Skip to content Skip to footer

Sections

Trending

Latest

More

© 2024 Truthout

Argentina Payment Plan Would Protect Poor

The long 2nd Circuit Court saga between Argentina and hedge funds commonly referred to as “vulture” funds, will likely come to an end soon. Judges in the 2nd US Circuit Court of Appeals gave holdout funds until April 22, 2013 to respond to Argentina’s payment plan. In late March, Argentinaoutlined a payment plan that would give holdout creditors virtually the same deal that 93 percent of creditors took in 2005 and 2010 debt swaps. “Argentina’s payment plan protects the integrity of deals made with other debt holders, but most importantly it ensures that these holdout hedge funds can’t take further advantage of the poor in developing countries,” said Eric LeCompte, Jubilee USA Network’s Executive Director. “We feel thatArgentina’s proposal to pay the holdout funds the same percentage as what was restructured in 2010 is a positive step.”

By
Hedge Fund Holdout – NML Capital – has Until April 22 to Respond
Religious Community Awaits 2nd Circuit Court Ruling
Washington, DC – The long 2nd Circuit Court saga between Argentina and hedge funds commonly referred to as “vulture” funds, will likely come to an end soon. Judges in the 2nd US Circuit Court of Appeals gave holdout funds until April 22, 2013 to respond to Argentina’s payment plan. In late March, Argentinaoutlined a payment plan that would give holdout creditors virtually the same deal that 93 percent of creditors took in 2005 and 2010 debt swaps.
“Argentina’s payment plan protects the integrity of deals made with other debt holders, but most importantly it ensures that these holdout hedge funds can’t take further advantage of the poor in developing countries,” said Eric LeCompte, Jubilee USA Network’s Executive Director. “We feel thatArgentina’s proposal to pay the holdout funds the same percentage as what was restructured in 2010 is a positive step.”
In 2001, when Argentina defaulted on roughly $81 billion, NML Capital purchased some of Argentina’s debt on the secondary market. When Argentina defaulted, they restructured with some of their creditors in 2005 and 2010 but holdout creditors, led by NML Capital, rejected the proposal and sued Argentina for the full amount in NY courts. “Vulture” funds buy the debt of poor countries or countries in financial distress for pennies on the dollar and then sue to make as much as a 400% profit. Jubilee USA Network introduced legislation in 2009 to stop these funds from making a profit off of poor countries. The International Monetary Fund and World Bank assert that vulture funds negatively impact debt relief and restructuring efforts in poor countries.
“The religious community has a deep commitment to protect the poor and the behavior of these vulture funds is morally bankrupt,” said LeCompte.
In June, these same vulture funds supported legislation in the New York State Senate and Assembly which would have allowed the funds to continue to litigate even after post-court judgment. Jubilee USA Network came out against the legislation and mobilized 4,000 supporters in NY to write, e-mail and call their State Assembly and Senate Members. With American Jewish World Service, Jubilee USA put enough pressure on the New York legislative bodies to stop the legislation from coming to a vote.
In October, the funds were able to convince Ghanaian Courts to temporarily seize an Argentine ship. The ship was eventually returned to Argentina. Then this past November, the vulture funds made a pari passu or parity argument in the US District Court and the court ruled in favor of the vulture holdout creditors. Argentinawas ordered to pay $1.3 billion on December 15, the same date they were to pay the creditors that had restructured. On February 27, the federal appeals court heard new arguments on the case and later gaveArgentina until March 31 to outline a payment plan. Argentina laid out a plan that would essentially give the holdout creditors the same deal as the majority of creditors that restructured. The court has now said that the vulture holdout creditors have until April 22 to respond to Argentina’s payment plan.
As part of the 2nd Circuit Court Proceedings, the US Government filed a friend-of-the-court brief noting a ruling against Argentina could make it much harder for countries in financial recovery or countries facing economic stresses to access credit and debt swaps. “Vulture funds hurt both legitimate investors and poor people. That’s why the US government got involved, that’s why the IMF and World Bank are against vulture funds,” stated LeCompte.
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn

Dear Truthout Community,

If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.

We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.

Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.

There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.

After the election, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?

It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.

We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.

We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.

Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.

We’re with you. Let’s do all we can to move forward together.

With love, rage, and solidarity,

Maya, Negin, Saima, and Ziggy