A group of funds including George Soros’s Quantum Partners LP and Kyle Bass’s Hayman Capital Management LP asked a London judge to protect a 1.3 billion-euro ($1.6 billion) investment in Argentinian bonds from New York lawsuits triggered by the country’s default.
The investors are “innocent third parties” in the dispute between Argentina and creditors who are refusing to participate in a restructuring deal, their lawyer Mark Hapgood said at a court hearing. They are “entitled to be paid their share” of the proceeds from the Euro-denominated bonds, he said.
Argentina’s attempts to recover from a 2001 default on debt totaling $80 billion have been hit by lawsuits filed by U.S. hedge funds led by Paul Singer’s Elliott Management, which say they won’t take part in an agreement for creditors to accept losses of as much as 75 percent. In February 2012, a New York court blocked Argentina from repaying bonds until it has compensated Singer and other holdout creditors.
Quantum and Hayman, along with Knighthead Capital Management LLC and RGY Investments LLC funds, asked Judge Guy Newey to order that an account holding about 226 million euros for interest payments on the bonds is covered by English law and not affected by court orders from New York. The account’s trustee, Bank of New York Mellon Corp., opposes the application.
U.S. court orders shouldn’t apply to bonds governed by jurisdictions outside of the U.S., Hapgood said.
BNY Mellon spokesman Tim Steele declined to immediately comment. Tom Hibbert, a lawyer for the funds, didn’t immediately respond to an e-mail seeking comment.
BNY Mellon wants the U.K. case to be put hold on hold until the U.S. disputes are resolved, according its documents from the London hearing.
“The Euro funds were not and are not at risk” and don’t require any action from the London court, the bank said in the documents.
The case is Knighthead Master Fund LP & Ors v. The Bank of New York Mellon & Anr, High Court of Justice, Chancery Division: HC14B03236