Argentine Defaulted Bond Holders Oppose Request to Court

Holders of defaulted Argentine bonds opposed a request by holders of restructured bonds to let a New York appeals court clarify what the equal treatment provision of the securities contracts means.

The request to have the U.S. Court of Appeals in New York certify the question to the state appeals court for interpretation is “patently inappropriate,” Elliott Management Corp.’s NML Capital Fund said yesterday in a court filing.

NML Capital last year won a decision by a federal judge in New York that Argentina has to pay owners of its defaulted bonds if it goes forward with payments to investors who traded in defaulted bonds for restructured ones. Argentina appealed the ruling to the federal appeals court where holders of the exchange bonds filed a request for state court review.

“This court had ‘little difficulty’ finding a violation of the bond agreements, and explained at length why specific performance was appropriate,” NML Capital said in the filing. “Movants’ attempt to use the certification device to second guess this court’s well-reasoned decision is patently inappropriate.”

On Oct. 26, the appeals court ruled that Argentina can’t treat holders of its restructured debt more favorably than the so-called “hold-out” creditors, who declined to participate in two rounds of debt restructuring. Argentina argued last month that the court should ask New York State’s highest court to determine that issue under state law.

The case is NML Capital Ltd. v. Republic of Argentina, 12-00105, U.S. Court of Appeals for the Second Circuit (Manhattan).

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