US Supreme Court building (photo: Wikipediture
The US Supreme Court rejected an appeal by the Argentine government in the case against the vulture funds, thus ratifying the first instance ruling by New York judge Thomas Griesa, favourable to the holdouts. The decision also allows for the vulture funds to seek information about Argentine assets overseas that could be seized in order to pay outstanding debt.
Argentina will now have to pay the plaintiffs -NML, Aurelius, Blue Angel, and others- US$1.3bn and will not be allowed to pay the other creditors without also paying the holdouts. However, there are other funds which did not take part in the debt swaps that could also sue the state for up to US$7bn in light of today’s ruling. Finally, there are fears that the exchange bondholders -whose appeal before the Supreme Court was also rejected- could also demand to be paid the original debt in full if judge Griesa does not open a negotiation between the parts. This could bring the total debt up to US$20bn.
However, President Cristina Fernández de Kirchner has already said that the country does not have the money to pay the holdouts, and that they will not give them priority over the exchange bondholders. If the country does not pay, it will once again default on its debt.
The government has the possibility of requesting a rehearing within the next 25 days -whilst it is unlikely that it would be conceded, it could buy the government some time until after the end of the month, when the next debt repayment is due.
It is expected that Judge Griesa will open an instance of negotiation where Argentina could try to obtain better terms of payment.
President Fernández will give a speech tonight at 9pm, to be broadcast by radio and TV, in which she is expected to refer to the Supreme Court resolution.
The post US Supreme Court Rejects Argentine Appeal on Vulture Funds Case appeared first on The Argentina Independent.