Hedge Funds Win, Lose Court Cases Against Argentina

Jul 6 2011 | 11:24am ET

Two hedge funds battling with Argentina over its debt default nine years ago enjoyed a  court victory and suffered a legal defeat on either side of the Atlantic this week.

Yesterday, a federal appeals court in New York said that Elliott Management and NML Capital cannot seize $105 million of assets held by the Argentine central bank at the Federal Reserve Bank of New York. The ruling, overturning a lower-court decision from last year, held that the Banco Central de la Republica Argentina is covered by the U.S. Foreign Sovereign Immunities Act.

The hedge funds had sought to seize the assets after a 2006 ruling that Argentina, which has settled the defaulted bonds with more than 90% of their holders, had to pay Elliott and NML the full value of the bonds plus unpaid interest, a total of $284 million.

The president of the Banco Central, Mercedes Marco Del Pont, said she expects Elliott and NML to appeal the appeals court decision to the U.S. Supreme Court.

At another supreme court today, the hedge funds won a major victory to help offset their U.S. defeat. The U.K. Supreme Court took the opposite view to the New York court, ruling that NL can use the U.S. judgment to seize Argentine assets in the U.K., rejecting Argentina's argument that British courts had no jurisdiction.

Argentina had waived some sovereign immunity rights when it sold the bonds.


In Depth

Q&A: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Viking Manager In Rent Dispute

Aug 11 2014 | 4:14am ET

A hedge fund manager is demanding most of his money back from his former landlord...

Guest Contributor

Majority Of Inflows Go To Brand Name Hedge Funds

Aug 12 2014 | 9:00am ET

Since the market correction of 2008, a vast majority of hedge fund net asset flows...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note