MercoPress. South Atlantic News Agency

Argentina must explain to Judge Griesa why it is not in contempt of court

Griesa stated on Thursday that the Argentina faces a 50,000 dollar daily fine if it does not comply with the ruling.

New York district judge Thomas Griesa has asked Argentina to show cause and explain why the country should not be declared in contempt, following its decision not to pay holdout investors full amount for their defaulted bonds as the judge’s ruling ordered on August 8.

Griesa stated on Thursday that the Argentina faces a 50,000 dollar daily fine if it does not comply with the ruling.

The judge originally summoned Argentine representatives for Friday 26 at 2pm, but court officials pointed out he had already ordered a hearing with Citibank lawyers, after the bank requested an injunction, in order to honor a payment on Argentine bonds held under local legislation and in foreign currency.

Griesa later moved the meeting with Argentine representatives for next Monday.

Meanwhile, the Argentine government opened today the “Nación Fideicomiso” account at the Central Bank of Argentina as evidence of the country’s “good faith and its willingness and ability to pay in equitable conditions.”

The objective is to allow for the payment of the debt corresponding to 100% of the bonds issued in the 2005 and 2010 debt swaps to safeguard public order and the contracts signed in that restructuring, removing the Bank of New York Mellon as payment agent.

NML Capital headed by Paul Singer requested Judge Griesa on Thursday to declare Argentine in contempt of court and impose a daily fine of 50.000 dollars until it complies with the ruling to pay the holdouts 1.3bn dollars plus accrued interests.

The request was presented NML solicitor Robert Cohen in a 29 page document, with all the legal background for the presentation.