Bank of New York Mellon Corp. told a New York judge that he shouldn’t hold the bank responsible if Argentina fails to pay the holders of its defaulted debt.
The U.S. Court of Appeals in New York ruled Oct. 26 that Argentina must pay holders of the defaulted notes if it pays off on its restructured debt. U.S. District Judge Thomas Griesa is considering how to apply the ruling to third parties, including BNY Mellon, and to set a payment formula.
Holders of the defaulted bonds, who are seeking more than $1.4 billion, want Griesa to block Argentina from going forward with more than $3 billion in scheduled payments on the restructured debt next month if it refuses to pay them as well.
“As indenture trustee, BNY Mellon has no control over Argentina and no involvement in Argentina’s performance of any obligations to plaintiffs,” the bank said in a court filing today. “Plaintiffs’ efforts to threaten an indenture trustee with an extraordinary citation of contempt go too far.”
Griesa said he will rule by Dec. 1 on the payment formula and the issues relating to third parties. Argentina has asked the appeals court to reconsider its Oct. 26 ruling.
The case is NML Capital Ltd. v. Republic of Argentina, 08-cv-06978, U.S. District Court, Southern District of New York (Manhattan).