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In The NewsArgentina v US Hedge Funds
Argentina v US Hedge Funds
In 2001, Argentina failed to pay around $100 billion in debt and has since restructured its debt twice. When Argentina defaulted, they restructured their debt with some of their creditors in 2005 and 2010 for about $.30 on the dollar. NML Capital and Aurelius Capital Management rejected the latest proposal and have sued Argentina for the full amount plus interest in the New York State courts.
The legal dispute involves Argentina’s refusal to pay anything to the hedge funds that declined to take part in a round of restructuring in which most of the nation’s creditors from the 1990s agreed to accept less than what they were owed.
Those holdouts have won a $1.3 billion court judgment against Argentina, but so far the country has refused to pay.
On Wednesday, February 27, 2013, Argentina squared off with a group of US hedge funds in the 2nd US Circuit Court of Appeals. The hearing was over an order from a federal judge, telling U.S. banks processing the country’s debt payments to begin diverting a portion of that money to the holdouts.
“We pray that they will side with the people of Argentina, the US government and the world’s poorest people,” said Eric LeCompte, executive director of debt relief group Jubilee USA Network.
“If the judges rule in favor of these hedge funds, it will mean these funds will more aggressively target poor countries in fragile financial recovery. If they rule with Argentina, it will mean that it will be harder for these types of funds to exploit countries in financial distress.”
To read Jubilee USA’s press release, click here
To read France 24’s article, click here.