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

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note