Teleconference Coverage:

Teleconference Coverage:

 

La Nacion: “A vulture fund accused the country of “wanting to evade” the judiciary” by Silvia Pisani (Raben, ATFA)

 

El Cronista: “The lack of respect from Argentina for the law knows no limits” (Raben)

 

Infobae: “Holdouts say that the swap is a “swindle” to evade the U.S. Court” (Raben, ATFA)

 

El Cronista: “Bruce Wolfson: "Many bondholders will not change jurisdiction”” (Wolfson, ATFA)

 

 

La Nacion

A vulture fund accused the country of “wanting to evade” the judiciary

 

Thursday, August 29, 2013

 

By Silvia Pissani

 

WASHINGTON.- Representatives of the so-called vulture funds yesterday said before the U.S. Supreme Court that Argentina “is seeking to escape” the arm o the law and for that reason, among others, the high court “should not dedicate its scarce resources” to considering the petition before those it does not intend to abide by what is decided.  

 

That was one of the arguments with which the funds that are suing Argentina over bonds that they have in their portfolios and which fell into default asked the Court to “abstain” from attending to the petition of our country to consider the case.  

 

The eventual arrival of the case before the high court is one of the last cards that are left for the government of Cristina Kirchner, after the serious legal setback that it suffered last Friday when the Court of Appeals of New York produced a very tough ruling in which it refuted the arguments of its defenders and labeled the country an “inveterate” violator of legal norms.  

 

The brief, signed by the fund NML Capital, property of American businessman Paul Singer, is the first formal attempt to block the aspiration of reaching the Supreme Court to avoid the initial order of Judge Thomas Griesa – upheld on Friday by the Court of Appeals of New York – which ordered the country to pay US$1.333 billion to the so-called holdouts, who are holders of debt that reject the government’s exchanges.

 

"He who appears before this court to ask that his case be resolved should do so at the disposition to accept its rulings,” the plaintiffs argue.  With that, they alluded to the arguments made by the government of Cristina Kirchner in the direction of not being willing to pay an adverse ruling.  

 

"Our client will not abide a ruling that obliges the payment of what we cannot nor should pay,” argued attorney Jonathan Blackman, of the firm Cleary, Gottlieb, Steen & Hamilton (defense team of the Argentine government) before the three members of the Court of Appeals when it took up the case.  In the courtroom were Vice President Amado Boudou and Economy Minister Hernan Lorenzino.

 

The document says that authorities from the government, “including President Cristina Fernández de Kirchner", are planning at those moments to “evade” judicial opinions from lower court, in what seems an allusion to the announcement of the President to seek a “Plan B” if the outcome is not the one hoped for.

 

The brief was filed yesterday afternoon, after a suggestive request to postpone for 48 hours that, in the facts, coincided with the official announcement of the reopening of the swap, in which the defenders of the holdouts called a move “to gain time.”

 

Argentina wants the Supreme Court to take the case, a court in which, in local circles, many give it little chance of success.

 

The court could give three responses: grant it, not grant it, or in third place, ask the solicitor general of the United States to issue his opinion.  The government hopes, at least, for the third.

 

"We believe that all that is left, soon, for Argentina is to sit down and seriously negotiation with its creditors,” said Robert Raben, of American Task Force Argentina (ATFA), one of the most active lobby groups in favor of the holdouts, yesterday.

 

The lobbyist admitted that the reopening of the debt swap that was evaluated yesterday in Congress “could make some holdouts give up the battle and accept it,” but assured that “in no way will they have 100% and for that the problem will remain.”

 

He also insisted that “it serves little” for Argentina to turn to a change of jurisdiction of payment of its debt in default because “that would violate the law” and would open up the possibility of new lawsuits.

 

The other judicial possibility that the Argentine government has in play is to ask the New York court again for a “complete” review of the case.  “I don’t know what sense it makes to ask for it, beyond gaining a little more time,” Raben insisted yesterday.

 

In that case, the deadline for solidifying that request expires on September 6.  The appellate court could take until the end of next month to give its response which, according to opinions in agreement, will be negative.  

 

"They’ve already denied that chance once, and after the severe arguments that the judges made in their ruling last Friday, I don’t believe there is room for new reviews,” Raben indicated.  

 

Cost of insurance against default rises

 

The cost of insurance against default by Argentina (credit default swaps) rose again yesterday on the international market.  According to a report from the Bloomberg news agency, the contracts at give years to protect against an eventual Argentine default rose yesterday 118 basis points, to 2944 points.  It is the most expensive interest rate in the region and one of the highest collected in the world for a similar contract.  In the City, in fact, there has been doubt in recent days if an eventual technical doubt by Argentina could set off the payment on these CD contracts or not.

 

 

El Cronista

Argentina’s lack of respect for the law knows no limits 

 

Thursday, August 29, 2013

 

In a telephone press conference held yesterday to respond to the “new plan by President Kirchner to evade court orders from the United States,” the executive director of American Task Force, Robert Raben, said: “in response to the decision of the Court of Appeals, Argentina carried its challenge to the judiciary of the United States to a new and amazing level.  In a prime time speech (central time), President Kirchner announced that the country is trying to evade the decision of the Court of Appeals, by altering the mechanism of payment of bonds to avoid potential attachments.”

 

“This is even more blatant because in November 2012, Argentina committed in a judicial filing in the United States to not alter or modify the specific processes or mechanisms of transfer through which it will make payments on the exchanged bonds.  To violate a federal court order is a serious crime.  It’s clear that Argentina’s promises are empty and that its lack of respect for the law knows no limits,” Raben said.   

 

And he let off that despite that the country hides behind the argument that the swap is voluntary, Argentina would be in clear violation of the order of Judge Griesa.

 

 

Infobae

Holdouts say that the swap is a “swindle” to evade the U.S. Court

American Task Force Argentina, a lobby group in favor of the funds like that of Paul Singer, say that the country is defying the American judiciary to an “amazing level”.  They ask to negotiate with the creditors.

 

Thursday, August 29, 2013

 

American Task Force Argentina (ATFA) is an organization that defends the interests of U.S. bondholders that didn’t enter the exchanges of 2005 and 2010.  It’s led by Robert Shapiro, an ex-economic adviser to Bill Clinton, and various ex-officials, Nancy Soderberg (ex-ambassador), and Robert Raben, who acts as executive director.  

 

ATFA has among its members the fund Elliott Associations, of multi-millionaire Paul Singer, which is suing Argentina in the New York court.  Raben came out to delineate the latest measures of the Argentine government.  

 

"The Court of Appeals issued a clear and important decision to say to Argentina that it must comply with the promises made in its contracts.  The court also said that this is an extraordinary case because Argentina is singularly recalcitrant,” he shot off.

 

"In response, Argentina comes out to defy the U.S. judicial system to a new amazing level.  In a speech, President Kirchner announced that Argentina is trying to evade the decision of the court, altering the mechanism of payment of bonds to avoid potential attachments,” he said in an allusion to the swap that the government proposes to move bonds with New York law to Buenos Aires.

 

According to what Raben says, "this is even more blatant, since in November 2012 Argentina committed itself in a court filing in the U.S. that the process or mechanisms of bond transfers would not be altered or modified.”

 

"To violate an order of the federal court is a serious crime.  It’s clear that Argentina’s promises are empty and that its lack of respect for the law knows no limits,” he attacked.    

 

Finally, in a statement issued today by ATFA, it “calls on Argentina to cease all attempts to evade the legitimate orders of the courts that it has appeared before voluntarily.”

 

"In turn, the leaders of Argentina must sit down with the nation’s creditors and work out a just resolution of its debt obligations, as it has been asked to for some time,” it concludes.

 

 

El Cronista

Bruce Wolfson: "Many bondholders will not change jurisdiction”

The attorney from the firm of Bingham McCutchen, based in New York, estimates that a large number of bondholders will not be willing or able to do the swap to local law, by which the risk of default remains latent.  Holdouts can take measures.

 

Thursday, August 29, 2013

 

MARÍA ELENA CANDIA Buenos Aires

 

“The announcement seems to have direct access to creditors that didn’t sue Argentina but also didn’t accept the swap of 2005 and 2010, only they could be interested,” said Bruce Wolfson, attorney from the firm of Bingham McCutchen, based in New York.  He is close to the most powerful group of holdouts, American Task Force Argentina, which are suing the country in American courts.  He was a partner and counsel general for the Rohatyn Group and general director at Bear, Stearns & Co.  Since 1999, he’s been an assistant professor at Columbia University on international affairs.   While he believes that Argentina can violate the order of the Court of Appeals of March 5, he argues that until there is no concrete measure, one still cannot take away any legal conclusion.

 

-How do you interpret the measures announced by the government?

-The announcement was interesting but showed that the government is still going in the same direction.  While Argentina presented a more conciliatory message, it still is offering to the creditors that didn’t enter the swap the same agreement that it presented before the Court of Appeals on March 29 and continues seeking ways to continue paying the bondholders that entered the swap, but not the holdouts.

 

-Do you think the holdouts will enter the new exchange?  

-The announcement seems to have direct access to the creditors that didn’t sue Argentina but also didn’t accept the swap of 2005 and 2010.  Only they could be interested in participating since the holdouts rejected the proposal repeatedly.  Among those that could participate are creditors that acquired bonds after 2010 and who see the reopening of the swap as an opportunity.

 

-What’s your reading of the change of jurisdiction?  

-There are a lot of speculations around the way that this exchange will be done.  As long as we haven’t seen the legislation on the issue it will be impossible to evaluate this option.  The putting together of a mechanism of payment that doesn’t require the participation of the parties involved by mandate of the Court, but at the same time satisfied the holders of bonds with foreign legislation, will not be easy.  Even if it succeeds, it’s almost certain that a large number of bondholders won’t be willing or won’t be able to participate in the swap, by which the risk of default remains latent.

 

-Therefore, what legal measures could the holdouts take?

-It wouldn’t surprise me if they ask the Court for the Second District (Judge Griesa) to act in case the swap proposal to change legislation of the bonds could violate the court order of March 5, 2012, and is an evasive move, leave ineffective or impeding the execution of the court order, including the alteration or modification of the process or the application of certain mechanisms of transfer by which the payments of the bonds is done without prior approval of the court.

 

-What are the implications of the presentation made by NML before the Supreme Court yesterday?

-The NML filing was in response to the petition of certiorari before the Supreme Court by Argentina on June 26.  It’s a standard procedure by the other party to oppose this petition.  This doesn’t affect the right of Judge Griesa to put the March 5 order into effect which prohibits Argentina from evading the orders it said it was going to honor.