US Supreme Court agrees to consider Argentina litigation case with hedge funds

Saturday, January 11th 2014 - 06:57 UTC

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A decision from the Supreme Court is expected by the end of June

The US Supreme Court agreed on Friday to consider a dispute over subpoenas in a case stemming from long-running litigation over Argentina's obligations to bond investors in the wake of its default on 100 billion dollars in sovereign debt in 2002.

The court agreed to hear Argentina's appeal after an appeals court said a hedge fund could subpoena banks for information about the country's non-US assets.

The hedge fund, NML Capital, a holder of Argentine bonds, wants repayment in full in a fight that was prompted by Argentina's 2002 default. The repayment issue is the subject of high-profile litigation that could be headed to the high court in a separate case.

“Argentina is in open defiance of dozens of judgments of US courts to pay American investors what it owes,” said Theodore B. Olson, a lawyer for NML. “It's time for Argentina to stop trying to evade its obligations and to follow the law.”

In the matter the court acted upon on Friday, the question is the narrower issue of whether NML could enforce subpoenas against Bank of America and Banco de la Nacion Argentina.

In August 2012, the 2nd US Circuit Court of Appeals in New York rejected Argentina's argument that some subpoenas should be quashed because it would infringe on its sovereign immunity. The Obama administration backed Argentina in the case.

NML, a unit of billionaire hedge fund manager Paul Singer's Elliott Management Corp, is one of several bondholders that rejected offers accepted by other investors to swap the defaulted debt for new paper at a steep discount. The other major player is Aurelius Capital Management.

In the higher-profile case, the same appeals court declined in November to reconsider an order requiring Argentina to pay 1.33 billion, ruling in favor of the bondholders. Argentina is now expected to seek a Supreme Court review in that case. A decision in the subpoenas case is expected by the end of June.

The case is Argentina v. NML Capital Ltd, U.S. Supreme Court, 12-842.

Categories: Economy, Politics, Argentina.

Tags: Argentina, bonds, Elliot Management fund, hedge funds, New York State Court of Appeals, NML Capital Limited, Paul Singer, Supreme Court of the United States.

Top Comments

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Conqueror
Should be straightfoward. Argieland gave up its sovereign immunity in order to push its criminal con-trick.
Jan 11th, 2014 - 10:44 am 0
yankeeboy
Argentina certainly giving the courts a lot of new legal ground. It will be interesting to see how long the arm of the courts actually reach after this verdict.
The U$ millions they've spent holding this up in court when everyone knows that in the end ( this year) they'll have to pay, the debt plus interest plus the other sides legal bills is shameful.

Rgs re crooks to the very core of their being.
Jan 11th, 2014 - 12:22 pm 0
bushpilot
I don't know. If it is so straight forward why did they agree to hear it?

It is mostly a liberal bench these days I think. They rule based on what they believe in, not on what is written down and agreed upon.

They'll be prejudiced against the ones with money and think they shouldn't win.

Also, they rule in favor of the Federal Govt. vs. State Govt.

So they might come up with something like the holdouts are interfering with U.S. foreign policy which is the Executive's prerogative so it is contrary to the U.S. Constitution.

I'm just offering an unqualified opinion, but I can't see them taking this on to just say you have to pay all that money back. I'd be happy if they told Argentina “you can't snake your way out of debt, you conniving thieves”
Jan 11th, 2014 - 01:32 pm 0

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