Court Won't Rehear Argentina-Elliott Case

Mar 27 2013 | 10:42am ET

Argentina has suffered another court defeat in its battle with hedge fund Elliott Associates over its 2001 default.

The U.S. Second Circuit Court of Appeals will not rehear the country's appeal of a lower-court ruling that bars Argentina from paying bondholders who accepted its debt exchanges before it pays holdouts, like Elliott affiliate NML Capital. A three-judge panel of the court in October upheld that ruling.

Argentina had sought a rehearing before the full court. It can still appeal to the U.S. Supreme Court; the country has vowed to exhaust its legal avenues.

The two sides are still waiting on another ruling from the Second Circuit, over whether the lower-court judge was correct to lift a stay which allows Argentina to continue paying exchange debtholders during its appeals. During a contentious hearing last month, the court did not appear inclined to leave the stay in place, and Argentina suggested it would ignore any rulings contrary to its wishes.

Argentina has until Friday to respond to a request from the Second Circuit for an alternative payment proposal.

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