Argentina Wins Stay Extension In Hedge Fund Fight

Nov 4 2013 | 11:45am ET

A federal appeals court gave Argentina a rare legal victory in its battle with Elliott Management and other hedge-fund holdouts from its 2001 default.

The U.S. Second Circuit Court of Appeals, which has twice ordered the country to pay the holdouts or default on the new bonds it issued to creditors that accepted its restructuring, refused to lift its stay of those orders. The court said that the stay would remain in place to allow Argentina to make a second appeal to the U.S. Supreme Court, which last month decided not to hear its case.

Elliott sought to lift the stay on Oct. 15, days after the Supreme Court refused to grant certiorari to Argentina. The court did not give a reason for not taking up the case.

"The court's order confirms that the legal procedures pursued by Argentina are right and we ratify that Argentina will exercise its defense in all available judicial bodies," the country's finance secretary, Adrian Cosentino, said.

"We will now wait for pending resolutions and then for a presentation at the U.S. Supreme Court."

The Friday ruling follows a letter Elliott sent to investors last week in which it said it remains hopeful that a "consensual resolution" can be reached in the decade-long battle.

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