US Judge criticizes Argentine ‘continued intransigence’ in refusing to honour lawful debts
A US judge threw out claims by bondholders on up to 2.21 billion dollars of Argentine funds held at the Federal Reserve Bank of New York, but criticized the country’s “continued intransigence” in refusing to pay creditors holding defaulted debt.
Argentina defaulted on roughly 100 billion in debt during the 2001-02 economic crisis. It restructured about 92% of that through swaps in 2005 and 2010, but holdout creditors are still suing to recover the full value of their bonds.
US District Judge Thomas Griesa in Manhattan said this week that bondholders Aurelius Capital Partners LP and affiliates, as well as the investor Kenneth Dart’s EM Ltd, failed to show the money held at the New York Fed could rightfully be used to satisfy their claims.
The holdouts, who have been awarded about 1.8 billion dollars of judgments in 12 cases, won an order last August to freeze the funds, which were deposited at the Fed in the accounts of Argentina’s Central Bank and Citibank. But Judge Griesa’s decision vacates that order.
“The funds are not the property of the Republic of Argentina” Griesa said, adding that the money was being held for “traditional central bank functions.”
Argentina, the Central Bank and Citibank argued that the money the bondholders had sought to seize, which was earmarked for paying creditors holding Argentina’s Boden 2012 bonds, never even passed through the New York Fed and was transferred to creditors or their custodians in Argentina.
In any case, Buenos Aires argued the funds ceased to belong to the country as soon as they were transferred over for payment to the Boden bondholders, an argument Griesa apparently backed.
The Boden 12 bonds were first issued in 2002 and the country has made regular payments on them.
Argentina has faced a decade of US litigation overseen by Griesa, which arose from its default. This has hampered efforts by Latin America’s third-largest economy to return to global capital markets.
Griesa said that while “the law and the facts” compelled his conclusion, he urged Argentina to do a better job addressing claims of holders of its defaulted debt.
“This is yet another situation growing out of the Republic’s continued intransigence in failing to honour its lawful judgment debts,” he wrote. “The plaintiffs in these cases, in seeking to vindicate their legal rights, are not able to do so by any regular and clear-cut devices.”
Griesa has granted several billion dollars in court judgments to holdout creditors. But so far, they have not been able to collect any money, because US sovereign immunity laws protect most assets owned by a country abroad.
Last July, a federal appeals court in New York ordered the lifting of a freeze on 100 million dollars of Argentina Central Bank deposits in the United States. It said US law shields property of a foreign central bank used for traditional central banking activities, regardless of whether the bank is independent from its parent state.
The 12 cases are all in the US District Court, Southern District of New York.
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They took a punt on high return from a flaky south american economy.
It went tits up there was a deal sucks to be you.
They decided not to go for it :(
Investing sometimes you win sometimes you lose
its the 21st economy in the world today and a bold statement by an american when the US was in the verge of defaulting a year ago and still keeps taking money from the Chinese to pay its bills.
want to talk about the real estate debacle that brought the US into recession, thousands lost their jobs and trade suffered across the globe?
Mmm, I'm sure that the US & UK could be much higher in the economy stakes if they too had simply torn up agreements, judgements, ignored their international obligations and acted wholly without honour or decency, which of course is needed to ensure a decent intenational trading reputation. I think 'flaky south american economy' very neatly sums it up !!
The question isn't whether Argentina should be in the G20, the question is whether Argentina should be in the G77.
Argentina historicaly not the best history of stability so basicaly any investing woulud have been high risk high return unless somebody was a complete idiot.
That's high risk, terrible terrible return.
High risk, yes, but at the time investors were being misled by both the US investment banks and the Argentine government.
last thing they need is for developing countries to develop even more proof that they have been abused for the past 100 years in benefit of the rich countries.
@5. Its the IMF who says so you moron. Your obsession with INDEC is making you look silly. do some research before explaining every single aspect of argentina's economy as a result of an INDEC number. All INDEC does is come up with a price index for a range of products - and measure inflation accordingly.
There are private organizations that do this same thing and the IMF or anyone else can chose which source to trust to reach a conclusion on what they are working on.
All of the economic reporting from INDEC, poverty, GDP, Inflation have been skewed for the last 8 years. They're all wrong and it is going to be really ugly, embarrassing and costly when the IMF audits. It is estimated ARG has underpaid Inflation linked bonds by the 10s of BILLIONS of U$. More than you currently have in BCRA reserves.
You are talking about Argentina past time ...present time is different.!
What's a trillion when you can have a billion?
One bright spot about being at the near the bottom of the world economies the others have to do REALLY REALLY BAD before you can sink any further.
So we have been doing awful for 10 years yet still somehow are able to fake it somewhat.
You are sad, to you the only form of respect is money. Money, money, money. Which obviously means you piss on those poorer than you in real life. Either you are a spoiled 17 year old, or living on a trust fund you did nothing to earn. LOL... and you think those who work for a living are worthy of less respect. Poor kid.
You have to think like the Ks, tell the lie over and over and eventually some people will believe it. Under reporting the Inflation gave them 2 very good short term outcomes, it lowered the inflation indexed bond interest payments for 8 years and it made people believe inflation was under control ( just ask dumb Axel). Now over reporting GDP wasn't quiet so good but you can't have 25% inflation with 2-3% growth it doesn't sound as great, but 8-9% like China well that's something they can be proud of. The problem is, if there was real growth how come tax receipts never quite kept up or reflected the “growth” but closely matched the real inflation rate? Hmm tricky, they need more $ to keep goings say about U$10-15 Billion a year, not as much in the first few years but more and more as time went on. So the take Anses assets, and add the monthly contributions to the general tax revenue stream, hmm that got them through 2 years, BCRA another 10-15Billion, another 2-3 yrs do you see how they do this? They have been stealing all the hard assets out of the country and replacing them with worthless Arg bonds. The accounts still look like they have a balance but they really don't. Funny I think it was only yesterday CFK stole another U$3.3 B from Ansess and it wasn't mentioned anywhere until the NYSE started asking where it came from.
Why do you think they want YPF? U$1.1 B in cash on hand, not a lot but when you are counting pennies it all helps.
This makes you mad, right? really upset?
@14 Respect is nothing about money, it's about paying your bills, not reneging on contracts (changing the terms of your bonds) and treaties (1850 Treaty of Friendship between Arg & UK), not bullying (Falklands), not invading other people's territory (Falklands), upholding international law (unmapped minefields) and a wide range of other things.
Argentina doesn't earn any respect, nor does it earn any money.
@15 U$2.1 Billion for new planes isn't a lot either.
United States, European Union (Germany, Italy, France, Spain, United Kingdom, Portugal, Ireland, Belgium, Netherlands, Luxembourg, Denmark, Sweden, Poland, Norway, Finland, Austria, Estonia, Latvia, Lithuania, Greece, Czech Republic, Hungary, Romania, Bulgaria Slovakia), Swizterland, South Korea, Israel, Japan, Australia, Canada, South Africa, Turkey formally file grievances against the Republic of Argentina at the WTO.
China, New Zealand, El Salvador, India, Vietnam Philippines, Honduras, Panama formally encourage the action but did not sign the agreement.
Russia and Malaysia did not officially encouraged but Russia said it would not oppose.
Mercosur members (Brazil, Uruguay, Paraguay), plus Chile, Peru and Colombia said they will not take part but “understand” the sentiments, however will attempt to further work bilaterally with Argentina.
This is breaking news across the 24 hour news channels.
OOOH NOOOO... What we do now??? Please, stop!
Fools! This only strengthens CFK because now it is official she can make it an “us against the world” argument.
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The action on Friday from countries including some of Argentina’s major trading partners is a high-profile slap in the face for the heterodox trade policies of Cristina Fernández, Argentina’s president, and a diplomatic embarrassment for the G20 member.
”The funds are not the property of the Republic of Argentina” Griesa said, adding that the money was being held for “traditional central bank functions.”
@ 17 Un poco de dignidad, loquita, pasaste de hacerte la macha a escribir con ironía para disimular tu dolor de ogt. Estás cagada en las patas mami y ahora sabés que el mundo se caga en ustedes, peronistas de mierda :)
Could it be because “Argentina's utter destruction and annihiliation of our race” would make you a bit of an extremist and not the rational poster you try to pretend to be?
As far as I am concerned those who invested in a risky should man up and deal with their losses due to Argenitna having defaulted. I cannot remember them or others complaining when these same investors were ripping big time benefits when the risk was playing in their favour.
They kind of remind me of idiots who go to the casino play roulette and win and are all happy about it and proud and go back home and tell their friends who much they know about the game. Yet when they lose, they blame bad luck.
Tough luck suckers!! learn to know the risk much better than you did for future times. Until them happy losses. In fact, I enjoy knowing the've lost a lot of money.
you ever borrowed money from a bank? if so did you ever default on the payments?
What you tell the bank? “man up you shouldnt have given me the credit card in the first place you idiots”
I always thought you were one of the clever people from RGland....now i am doubting it!
these people by owing them can hurt you alot more than you c;early understand
if you wish to compare taking a loan from a bank to speculating with bonds and shares, I'd strongly suggest you work on your comparisons.
Besides, Argentine paid 90% percent of it's defaulted debt. These were stubborn and greedy idiots. Serves them right
I love how you La Campora Gimps call them stubborn and greedy as if it's they who are in the wrong and not Argentina for just being a morally and economically bankrupt hell hole. Way to go with your projection there, maximo.
You're not very clever are you.
No, they are not the same.
One has more risk attached to it pays higher dividends. If you don't know that much well then you are truly in trouble.
And if it has more risk attached to it, then you have to deal with unfortunate events.
You gamble ....
you lose,
you STFU
pretty simple actually. Notwithstanding, I don't expect you to grasp it given that your previous contributions announced as Critical Thought included sentences such as “So he's basically just your typical argentinian.”
So, I am not surprised you won't understand. But, hell, don't lose hope mate, you just might come around...
Good luck
YOu'll need it
same with greece get a good rate of retun but a good risk of losing evrything.
uk low intrest low chance of losing everything.
Since Argentina forced most of the people that bought it's bonds to accept a debt exchange of 1/3 the value, and recently reopened this hilarious debt exchange ... the popularity of argentinian bonds has only been popular in Venezuela.
I guess you Le Camping Gimps are just waiting for the central bank foreign reserves to be depleted before you're unleashed on the Argentinian public in order to keep order.
Enjoy.
1/3.... of 1%.
Whereas you have rampant inflation, no one will lend you any money, you have to barter in order to get LNG and corruption is losing billions out of your coffers.
Our situation is much better than yours. Have you been kicked out of the G77 yet?
It's not going to be 'happy land' for at least a generation.
Here in the US we are are not in a “happy land” for the next generation. Who can afford to buy food? We are all trembling about the 15 trillon foreign debt and financial crisis that the “food stamps” US President Obama cannot resolved.
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