Should we in Ireland Follow the Example of President Cristina Fernandez of Argentina?
President Cristina Fernandez
Argentine President Cristina Fernandez said recently her country will not pay “one dollar to the vulture funds,” her term for the holdout investors who buy distressed or defaulted debt and then sue in international courts to get paid in full. Fernandez has vowed to keep making payments to other creditors.
BUENOS AIRES/NEW YORK (Reuters) – Argentina’s government will tell a U.S. judge on Friday that sovereign debt repayments made outside the United States are immune to U.S. law and seizures by holdout bondholders, the South American country’s state news agency reported.
Argentina is fighting an October ruling by a U.S. federal appeals court that would force the government to pay holdout creditors holding bonds that have been in default since 2002. It is due to present papers by midnight.
The U.S. 2nd Circuit Court of Appeals in New York last month ruled that Argentina discriminated against bondholders who refused to take part in two debt restructurings as the nation tried to recover from a $100 billion (63 billion pounds) default a decade ago.
The ruling sparked fears that U.S. courts could ultimately inhibit debt payments to creditors who accepted terms of the restructuring, out of consideration for investors who rejected Argentina’s terms at the time.
This would trigger a technical default.
The appeals court, however, referred the case back to the U.S. District Court to address the technical questions of just how debt payments would be calculated and how to treat the involvement of third-party banks such as Bank of New York Mellon, which act as transfer agents for money owed to exchange bondholders.
Posted on November 17, 2012, in buisiness, Government, IMF/ECB, International affairs and tagged ARA Libertad, Argentina, Bank of New York Mellon, Banks, debt repaymen, Friday, Ghana, Irish, Irish News, United States, United States courts of appeals, Yahoo. Bookmark the permalink. Leave a comment.