The lawyers representing Argentina arrive at the court of Judge Griesa for a hearing (photo: AFP/Don Emmert/Télam/dsl)
After yesterday’s announcement by Economy Minister Axel Kicillof regarding the deposit of over US$1bn to pay the exchange bondholders, Judge Thomas Griesa ordered the Bank of New York Mellon to stop the payment and to return the funds to Argentina.
Whilst many analysts feared that the money could be seized and used to pay the vulture funds, the judge only ordered the Bank of New York Mellon to stop the payment and Argentina to negotiate with the holdouts.
In a hearing this morning, Judge Griesa reminded the lawyers representing Argentina and the Bank of New York Mellon that the payment “can’t be done and it’s not allowed by this court. I want the banks involved to know that. This payment can’t be done and whoever tries to do it will be in contempt of this court.”
The mediator between Argentina and the vulture funds appointed by Griesa, Daniel Pollack, confirmed that the negotiations will begin this afternoon. During the hearing, Griesa highlighted that “negotiations are important.”
Even though the payment to the exchange bondholders was due on Monday, Argentina has a grace period of 30 days to make the payment. This gives the government until the end of July to negotiate a solution to the conflict with the vulture funds and pay the exchange bondholhers without entering a ‘technical default’.
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