Supreme Court Rejects Argentine Appeal—For Now

Oct 8 2013 | 11:26am ET

The U.S. Supreme Court yesterday said it would not hear Argentina's appeal of a lower-court ruling that orders it to pay hedge-fund holdouts from its 2001 debt default.

As is its standard practice, the high court did not give a reason for denying Argentina's petition for a writ of certiorari. And while the decision leaves the U.S. Second Circuit Court of Appeals' decision in favor of Elliott Management and other holdouts intact, it is not likely the justices' final word on the matter.

The Second Circuit is currently considering whether to rehear Argentina's case and has stayed its ruling that the country must pay the holdouts pending that decision. If the court again finds against Argentina, the country can seek review by the Supreme Court again next year.

"The Supreme Court's decision to not hear our appeal during this session does not change anything," Andrian Consentino, Argentina's finance secretary, said.

Argentina's president has vowed to never pay the holdouts. But Cristina Fernandez Kirchner is set to be sidelined for at least one month after undergoing brain surgery today, and her party is expected to fare poorly in congressional elections this month. If Argentina loses and refuses to pay, it could default on its restructured debt.

"Argentina's representatives have asserted that it will file another petition, but the facts of the case and Argentina's disregard for the rule of law remain the same," Ted Olson, a lawyer for Elliott affiliate NML Capital, said.

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