Court Puts Argentina Payment To Elliott On Hold

Nov 29 2012 | 1:29pm ET

Just weeks before facing the unpleasant choices of paying the hedge funds it calls "vultures" or defaulting for the second time in a decade, Argentina has won a crucial reprieve.

The same federal appeals court that last month upheld a ruling that requires Argentina to pay holdouts from its debt restructuring, led by hedge funds Elliott Associates and Aurelius Capital Management, reinstated a stay on that ruling that a lower-court judge junked last week. The reprieve, even if it is temporary, means that Argentina will not default on its exchanged debt next month. Its next payment after that is not due until March.

The U.S. Second Circuit Court of Appeals scheduled a hearing for Feb. 27 on the matter. Argentina had asked the court to stay the ruling until it exhausts its appeals, which could feature a rehearing by the full Second Circuit—a three-judge panel of that body rejected Argentina's first appeal in October—or a hearing before the U.S. Supreme Court.

A stay was also pushed for by Argentina's exchange bondholders. While Argentina had no comment on the ruling, a lawyer for its creditors said that the decision "signals [the court's] understanding of the serious constitutional and equitable issues at stake."

The ruling is a blow for Elliott and the holdouts; U.S. District Judge Thomas Griesa had ordered Argentina to pay $1.3 billion into an escrow account to cover payments due them on the defaulted debt. Griesa also signaled that he had run out of patience for Argentina, writing, "the less time Argentina is given to devise means for evasion, the most assurance there is against such evasion."


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...