Tuesday, 30 August 2016
Last updated 20 min ago
Dec 9 2013 | 11:01am ET
The U.S. government is no longer backing Argentina's bid to avoid paying its hedge-fund creditors—but that doesn't mean it supports making things easy for them.
U.S. Solicitor General Donald Verrilli has asked the Supreme Court to consider whether the lower courts erred in issuing and upholding a broad subpoena seeking information about Argentina's assets abroad. Verrilli said that the Obama administration's position in that they had "erroneously permitted blanket discovery into a foreign state's assets located outside the United States."
Earlier this year, the Obama administration declined to ask the Supreme Court to hear Argentina's appeal of rulings ordering it to pay hedge-fund holdouts from its 2001 default. The administration had previously backed Argentina's argument that, as a sovereign nation, it cannot be forced to pay the hedge funds, led by Elliott Management.
The Supreme Court in October duly rejected Argentina's bid for a hearing, although the country is thought to have a better chance at winning one next year, following the U.S. Second Circuit Court of Appeal's decision not to rehear the case.
The Second Circuit is also involved in the Obama-backed dispute, having ruled last year that Elliott could enforce subpoenas against Bank of America and Banco de la Nacion Argentina.