Argentina asked a federal appeals court to keep in place a stay that delays enforcement of a ruling against it in litigation over the country’s defaulted bonds.
Argentina filed court papers Oct. 25 asking the U.S. Court of Appeals in New York to reject a request by holders of $1.5 billion of the defaulted bonds, led by Elliott Management Corp.’s NML Capital and Aurelius Capital Management LP, to enforce the ruling immediately. The appeals court previously agreed to Argentina’s request for a stay while it seeks to appeal the court’s decision to the U.S. Supreme Court.
Lifting the stay would threaten payments on the restructured debt, the next of which are due Dec. 2. Argentina claimed it may be forced to default on $24 billion in restructured debt if the stay isn’t maintained.
Several groups holding the restructured bonds also urged the court to keep the stay in place, in papers filed Oct. 25.
The owners of the defaulted bonds cited a plan disclosed in August by Argentina’s president, Cristina Fernandez de Kirchner, to avoid the jurisdiction of U.S. courts by exchanging the restructured bonds, governed by New York law, for debt payable under Argentina law.
Argentina argued that Kirchner’s speech “expressed her disagreement with the court’s decision, her hope for review by the Supreme Court and her commitment to the holders of restructured debt.” Argentina said it isn’t planning to evade court orders.
In August, the appeals court upheld a lower-court injunction that would bar Argentina from paying holders of the restructured bonds if it fails to pay NML, Aurelius and the other plaintiffs. A lawyer for Argentina told a three-judge panel of the appeals court in February that the country “won’t voluntarily comply” with a ruling forcing it to pay in full the holders of defaulted bonds.
Argentina in 2001 defaulted on a record $95 billion of foreign debt. Holders of more than 90 percent of the bonds agreed to take new exchange bonds in 2005 and 2010, at a deep discount.
The lower court case is NML Capital Ltd. v. Republic of Argentina, 08-cv-06978, U.S. District Court, Southern District of New York (Manhattan). The appeal is NML Capital Ltd. v. Republic of Argentina, 12-00105, U.S. Court of Appeals for the Second Circuit (New York).