Obama Admin. May Side With Argentina In Elliott Case

Jul 15 2013 | 9:50am ET

The Obama administration may take sides in the battle between Paul Singer's Elliott Management and the government of Argentina, but not the side Singer would like.

The Washington Post, citing people familiar with the case, said the U.S. Justice Department is mulling filing a brief at the Supreme Court defending the concept of sovereign immunity, which protects nations from lawsuits. On Friday, reported the paper, Justice Department officials met with lawyers on both sides of the dispute, along with representatives from the Treasury and State departments.

Elliott Management is one of a group of U.S. hedge funds and investors that bought Argentine debt (some at fire sale prices following the country's default in 2002) and has refused to participate in the settlement deal Argentina has reached with most bondholders. Singer and the others are holding out for what they consider fair value of the debt. Argentina said if it loses the case, the investors could walk away with over $1 billion in profits.

Singer, a major Republican party donor, has spearheaded the battle in U.S. courts to force Argentina to pay up. At the appeals court level in New York, the Justice Department sided with Argentina on several issues.

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