MercoPress. South Atlantic News Agency

Hedge funds request US Appeals court to lift hold on a ruling to repay holders

“The stay has allowed Argentina to indulge its desire not to pay what it owes and can afford to pay,” the hedge funds' lawyers said in court papers.

US hedge funds fighting Argentina for repayment on defaulted debt asked a US appeals court on Tuesday to lift its hold on a ruling that ordered Argentina to repay the holders.

Elliott Management Corp's NML Capital Ltd and Aurelius Capital Management LP asked the 2nd U.S. Circuit Court of Appeals in New York to remove the stay, which delays implementation of the ruling while Argentina seeks to appeal to the U.S. Supreme Court.

“The stay has allowed Argentina to indulge its desire not to pay what it owes and can afford to pay,” the hedge funds' lawyers said in court papers.

A spokeswoman for Argentine Economy Minister Hernan Lorenzino said the Argentina government is aware of the motion and its lawyers are analyzing it.

The case stems from Argentina's 90 billion dollars default on its debt more than a decade ago. In two restructurings, in 2005 and 2010, creditors holding about 93% of the debt received 25 cents to 29 cents on the dollar.

So-called dissident bondholders led by the hedge funds NML Capital, which is a unit of Paul Singer's Elliott Management Corp, and Aurelius Capital Management refused to go along with the restructurings, arguing in court that they should be paid in full.

The case was filed in New York under the terms of the bond documents.

In 2012, U.S. District Judge Thomas Griesa found that Argentina violated a clause in the bond documents requiring the equal treatment of creditors. In November, Griesa ordered Argentina to pay 1.33bn dollars into a court-controlled escrow account for the dissident bondholders. The 2nd Circuit affirmed that holding.

Griesa also ordered Argentina not to pay its other bondholders without making the payment, raising the prospect that Argentina could go into default.

Tuesday's motion by the bondholders follows a decision by the US Supreme Court on Oct. 7 declining to hear a preliminary appeal by Argentina, although Argentina can petition the court again at a later date.