Truthout is an indispensable resource for activists, movement leaders and workers everywhere. Please make this work possible with a quick donation.
Washington DC – Elliot Management Corporation told investors it will pursue sanctions against Argentina for refusing to comply with a US court order to pay the hold-out hedge fund. The announcement was made in a letter obtained by Bloomberg News and says the fund would continue to search for Argentine assets globally.
“The case shows real challenges in the US court system’s ability to resolve debt disputes and enforce court orders,” said Eric LeCompte, Executive Director of the religious debt relief organization Jubilee USA. “The case motivated investors, banks and governments to prevent predatory and hold-out behavior by inserting protection clauses in contracts. The case moved a vote at the United Nations to create a new debt resolution process.”
In further attempts to resolve the disputes, US District Judge Thomas Griesa gave court-appointed mediator Daniel Pollack greater powers with the stakeholders. Pollack now has a mandate to bring investors other than the principal hedge fund plaintiffs to the table for comprehensive negotiations. Those investors represent roughly 8 percent of Argentina’s total creditors, while the other 92% accepted Argentina’s restructuring deals in 2005 and 2010. Hold-outs have filed about 60 cases with Griesa for about $10 billion in claims. Pollack has not yet set a date for the next round of negotiations.
The dispute stems from Argentina’s 2001 debt default. NML Capital, a subsidiary of Elliot, purchased Argentine debt on the secondary market and rejected Argentina’s restructuring offers. NML sued for full repayment in US courts, initially seeking more than $1.3 billion. Judge Griesa ruled that Argentina was required to pay NML and that until it did so, it could not pay the 92% of creditors that had accepted the restructurings. This June, the Supreme Court declined to hear the case. Argentina refused to pay the hold-outs and subsequently defaulted. During the course of the dispute, the US government, the International Monetary Fund and religious and development organizations have expressed concern that the case’s precedent could make it more difficult for poor countries to restructure their debts. Developing countries that could be impacted by the case precedent include the Democratic Republic of the Congo and Grenada, which have related cases in the New York system.
“I’m concerned by how the precedent in this case could hurt poor economies,” shared LeCompte. “These debt disputes have real impacts on vulnerable communities.”
Read a timeline and history of the Argentina case here.
Read how the case could affect Grenada and the Democratic Republic of the Congo.
Read Jubilee USA’s filing that urged the Supreme Court to take the Argentina/NML Capital case here.
Holding Trump accountable for his illegal war on Iran
The devastating American and Israeli attacks have killed hundreds of Iranians, and the death toll continues to rise.
As independent media, what we do next matters a lot. It’s up to us to report the truth, demand accountability, and reckon with the consequences of U.S. militarism at this cataclysmic historical moment.
Trump may be an authoritarian, but he is not entirely invulnerable, nor are the elected officials who have given him pass after pass. We cannot let him believe for a second longer that he can get away with something this wildly illegal or recklessly dangerous without accountability.
We ask for your support as we carry out our media resistance to unchecked militarism. Please make a tax-deductible one-time or monthly donation to Truthout.