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Holdouts add ‘amicus’ against Argentina in the U.S. Courts

Holdouts add ‘amicus’ against Argentina in the U.S. Courts
El Cronista
May 8, 2014
The holdouts yesterday asked the U.S. Supreme Court to reject the main proceedings against Argentina and uphold the ruling that orders the country to pay 100% of the debt in default in cash, in a brief filed with the Court. The investment fund NML Capital, of Paul Singer, accompanied its brief with a weighty amicus curiae, like the former Attorney General under the presidency of George W. Bush.
It is the main case that pits the country against the holdouts, known as pari passu. NML Capital is calling  for "equal treatment" from the country and demands collection on bonds in default for US$ 1.5 billion, between principal and punitive interests. It has a ruling in its favor from New York Judge Thomas Griesa, upheld by the Appeals Court of the Second District of that State. The rulings require the country to pay and that obligation extends to agents for the normalized debt, such as Bank of America: if Argentina does not pay, the court demands that the bonds in default be settled from the payments sent for the swap bonds, which would leave the country in technical default.
Argentina appealed to the Supreme Court on the grounds that such rulings violate federal laws such as the law of sovereign immunity. The Argentine position was supported by firm amicus curiae, like from the French government.  Also supporting the country were Brazil and Mexico. The United States anticipated that, in this case, it will support the arguments of the Argentine government.
Yesterday it was the turn of the holdouts to present their arguments. NML Capital insisted that the case should be settled in the New York courts, since that is the law which Argentina submitted to in its bonds, and that the judgments in their favor do not violate federal law. This was backed by the former Attorney General of United States from the Bush era, Michael Mukasey, and five former Federal judges.
The Supreme Court, which heard from both sides in a related case known as Discovery in late April, has not decided whether it will accept the case yet. The chances for Argentina, according to experts, are minimal. If the Court takes the case, the country will gain months in time and can reach next year with a decision in abeyance. That is the best of all possible worlds for the moment.
With that perspective on the horizon, the government began a series of reserved negotiations with the vulture funds, through third parties. The most notorious was the one led by the “friendly” investment funds Gramercy and Fintech, which proposed to Singer that they would hand over part of their debt as a plus to the reopening of the swap, still suspended.  For the moment, no negotiations succeeded.
Consulted in this regard, Cabinet Chief Jorge Capitanich didn’t deny negotiations with the holdouts. "It is not timely or convenient or prudent to issue value judgments or opinions with respect to a matter that is being tried in court,” he said. "Any communication by the Republic of Argentina is done through the lawyers who are handling the case or through official communications of the Economy Ministry," he continued.
Holdouts suman ‘amicus’ contra Argentina en la Corte de Estados Unidos

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