The managing partner of McCarter & English LLP in New York, Daniel Pollack, was assigned to mediate the stalemate between Argentina and its holdout bondholders after the U.S. Supreme Court last week let stand a decision requiring full payment on the debt.
U.S. District Judge Thomas Griesa directed that Pollack preside as a special master over settlement negotiations between Argentina and creditors the country refers to as “vultures.” The talks may take place in public or private, Griesa said in a court filing, adding that Pollack doesn’t have power to issue rulings.
“I am moving as rapidly as possible to be of assistance to the parties,” Pollack said in a phone interview. He declined to comment further, citing the sensitive nature of the case.
Argentina defaulted on a record $95 billion debt in 2001, replacing the defaulted bonds with new ones at a sharp discount in two restructurings. Bondholders that refused the exchange, including NML Capital, won their court battle when the high court on June 16 declined to review Griesa’s ruling that Argentina must pay holders of defaulted bonds when it pays the holders of its restructured debt.
The country, which has refused to comply with court orders in the past, says its $29 billion of foreign reserves are too low to meet the burden placed on it by the court rulings.
Pollack specializes in financial litigation in the firm’s New York office and his clients have included T. Rowe Price Associates Inc. and Wells Fargo & Co. He has served as an adjunct professor at the University of Arizona Law School, where he teaches a seminar on negotiating employment agreements.
Pollack represented mutual fund J.& W. Seligman & Co. in a lawsuit claiming then-New York Attorney General Eliot Spitzer overstepped his authority in market-timing investigations. Seligman’s suit was later settled, according to the law firm’s website.
Carmine Bocuzzi, a lawyer for Argentina in New York, asked Griesa in a letter today to delay all of the proceedings “to allow for the commencement of good faith negotiations between Argentina and its creditors.”
A stay would allow Argentina to make a June 30 debt payment on restructured bonds while beginning talks with the holdouts.
Argentina has settled major disputes with foreign creditors in recent months, Bocuzzi said in his letter to the court. In May, the government reached an agreement to compensate Madrid-based Repsol SA (REP) for seizing its Argentine unit in April 2012, and three weeks later reached a $9.7 billion accord with the Paris Club group of lenders.
The recent settlements, which Bocuzzi called “voluntary and equitable,” were “breakthroughs that reflect Argentina’s focus on emerging from the crisis of 2001 and normalizing its relationship with its creditors.”
Bocuzzi said Argentina can’t afford to pay some of its creditors in full while not paying others. He said that the total amount due to holdouts from the republic’s debt restructuring “exceeds half the country’s reserves.”
“No country could pay half of its reserves, and Argentina cannot afford to be left without the means to manage its currency or handle the rest of its economy, including meeting the needs of its citizenry,” Bocuzzi said in a letter to the judge today.
Griesa didn’t rule on the request for a delay.
The case is NML Capital v. Republic of Argentina, 08-cv-6978, U.S. District Court, Southern District of New York (Manhattan).
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