Hedgie Falls Short In Effort To Pass Law

Jun 13 2012 | 11:30am ET

Hedge fund manager Paul Singer’s chances of making good on an Argentine debt just got a little dimmer.

The Elliott Management founder has been pushing for passage of a bill in the New York State Assembly that would allow his firm to pursue court judgment claims against Argentina and other states.

On Tuesday, however, the bill failed to make it out of the judiciary committee.

According to the Wall Street Journal, the bill changes what the paper calls an “obscure doctrine of civil practice” that would apply in circumstances beyond Singer’s dispute with Argentina. The proposed legislation has sent a chill down the spines of the banking and legal industries, which fear it might discourage borrowers from doing business in the state.

In fact, the New York State Bar Association, the New York Bankers Association and the Securities Industry and Financial Markets Association have all lined up against Elliott on the measure.

"The banks' suggestion that the bill would harm New York as a financial center is ludicrous and a mere cover for their cynical effort to help Argentina evade its creditors," an Elliott spokesman told the WSJ.

Elliott’s dispute with Argentina dates to 2001 when the country defaulted on $80 billion of debt. Elliot has won five judgments worth a total of $1.6 billion against the country but is seeking several hundred million more in suits that are pending.

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