Elliott Management Corp.’s NML Capital Fund won a court ruling forcing Argentina to pay interest on its defaulted debt.
Argentina must make the payments to NML before or at least at the same time it pays interest on bonds it issued in its 2005 and 2010 debt restructurings, U.S. District Judge Thomas P. Griesa in Manhattan ruled on Feb. 23. Griesa found in an earlier ruling that Argentina repeatedly breached its payment obligations under NML bonds.
“Creditors of the Republic have no recourse to bankruptcy regimes to protect their interests and must rely upon courts to enforce contractual promises,” Griesa said in the ruling. “No less than any other entity entering into a commercial transaction, there is a strong public interest in holding the Republic to its contractual obligations.”
NML is entitled to information detailing the timing and amounts of Argentina’s bond payments, what the country owes on other obligations and any other material appropriate to confirm compliance, Griesa ruled.
Argentina is “permanently prohibited” from taking any action to evade the court’s ruling or render it ineffective by altering or amending how it makes payments on its bonds, Griesa said.
NML owns a beneficial interest representing $132 million principal amount on certain floating-rate accrual notes issued by Argentina, according to court documents.
Officials of Argentina weren’t immediately available for comment. Jorge Arguello, Argentina’s ambassador in the U.S., said the country has appealed the order, newspaper La Nacion reported.
The case is NML Capital Ltd. v. Republic of Argentina, 09- cv-01707, U.S. District Court, Southern District of New York (Manhattan).
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