Reuters/Buenos Aires
Argentina took its legal battle with “holdout” creditors to the US Supreme Court by appealing an adverse decision handed down by a lower US court in October of last year, state news service Telam said.
“Argentina introduced the first special appeal (Writ of Certiorari) before the Supreme Court of the US,” Telam said, citing unnamed sources in the economy ministry.
The move came while investors are still awaiting a ruling by the 2nd US Circuit Court of Appeals, which is expected in the coming weeks. If the Supreme Court decides to hear Argentina’s case, it would not do so until the lower court has ruled.
For the last decade, Argentina and the creditors have sparred in US courts over the South American country’s 2002 debt default. US courts last year ruled in favour of the holdouts, who rejected debt exchanges in 2005 and 2010.
The creditors are suing to be repaid in full after spurning the two debt swap offers, which were accepted by about 93% of bondholders.
A US judge ordered Argentina to pay the holdouts the full $1.33bn owed them the next time it serviced restructured debt. Argentina appealed.
Investors are following the case closely because Argentina appears willing to enter into technical default in order to avoid paying the holdouts any more than other creditors received in the 2005 and 2010 exchanges.
The nearly 93% of bondholders who accepted the terms of those two debt swaps got returns of as low as 25 cents on the dollar.
In November, US district judge Thomas Griesa ordered Argentina to deposit the $1.33bn owed to holdouts in an escrow account by December 15, when restructured debt came due. He also required that third parties involved in payments on Argentina’s restructured bonds be held accountable if the court order were evaded. This included Bank of New York Mellon Corporation, which acts as trustee for the exchange bondholders.
