Judge Says Argentine Central Bank Reserves Seizable
Sep 30 2013 | 11:40am ET
Argentina has lost another legal fight with Elliott Management and the other hedge funds seeking payment in full on the country's defaulted debt ahead of a potential crucial U.S. Supreme Court decision.
The high court may decide today whether to hear Argentina's appeal of a lower-court ruling ordering it to pay the holdouts—something Argentina says it will never do, and which could trigger a default by the country, its second in 13 years. In the meantime, the federal trial-court judge in New York has ruled that the holdouts, if victorious, can go after the reserves of Argentina's central bank.
"I believe the plaintiffs' demand is legitimate as for certain purposes BCRA is the alter ego of the Republic" of Argentina, U.S. District Judge Thomas Griesa ruled. For once, however, Argentina may have the appeals court on its side: The Second Circuit Court of Appeals, which has twice ruled against the country in its bid to avoid paying the holdouts, has twice ruled that the central bank is covered by sovereign immunity and its assets are "non-seizable."
The Supreme Court's nine justices are meeting today to consider which cases they will hear. If they choose to take the case, the decision could be announced tomorrow and would be heard and decided next June. If the court members decide not to hear the case—which would allow the Second Circuit ruling adverse to Argentina to stand—it would not be announced until Oct. 7.
The justices could also punt, asking the U.S. solicitor general for the Obama administration's opinion on whether it should take the case. The administration said this summer that it would not ask the court to hear the case, ending its practice of supporting Argentina in the courts. Or it could wait until the Second Circuit decides whether to rehear Argentina's appeal.
https://www.finalternatives.com/node/24851
The high court may decide today whether to hear Argentina's appeal of a lower-court ruling ordering it to pay the holdouts—something Argentina says it will never do, and which could trigger a default by the country, its second in 13 years. In the meantime, the federal trial-court judge in New York has ruled that the holdouts, if victorious, can go after the reserves of Argentina's central bank.
"I believe the plaintiffs' demand is legitimate as for certain purposes BCRA is the alter ego of the Republic" of Argentina, U.S. District Judge Thomas Griesa ruled. For once, however, Argentina may have the appeals court on its side: The Second Circuit Court of Appeals, which has twice ruled against the country in its bid to avoid paying the holdouts, has twice ruled that the central bank is covered by sovereign immunity and its assets are "non-seizable."
The Supreme Court's nine justices are meeting today to consider which cases they will hear. If they choose to take the case, the decision could be announced tomorrow and would be heard and decided next June. If the court members decide not to hear the case—which would allow the Second Circuit ruling adverse to Argentina to stand—it would not be announced until Oct. 7.
The justices could also punt, asking the U.S. solicitor general for the Obama administration's opinion on whether it should take the case. The administration said this summer that it would not ask the court to hear the case, ending its practice of supporting Argentina in the courts. Or it could wait until the Second Circuit decides whether to rehear Argentina's appeal.
https://www.finalternatives.com/node/24851
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