mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
SCOTUS Delivers Argentina Knockout Blow


Argentina’s wild and wacky quest to avoid paying its creditors—a saga that at one point saw the “pride of Argentina’s navy” seized at a Ghanaian port by an American hedge fund—is nearing its sorry end. Earlier this summer the IMF and US Treasury left Argentina for dead; yesterday the US Supreme Court smacked down Argentina’s petition to avoid paying all of its bondholders. The LA Times reports that the legal fight is far from over, but it’s hard not to conclude that Argentina is down for the count:

The high court’s decision, handed down Monday, upholds a 2012 ruling by a lower court obliging the South American republic to pay all its bondholders at once—including those that have refused offers to renegotiate the value of their holdings and instead brought suit seeking repayment.

Creditors who sued the nation, including two large hedge funds, hailed the decision as a victory. But Argentina is expected to file an appeal to the Supreme Court on a separate ruling in the same case, which would further delay a final resolution.

Argentina is determined to shirk the $1.4 billion it owes the plaintiffs (its creditors) and to avoid its second default in a dozen years. The government, no stranger to doing end runs around the rule of law at home, is sure to get creative in its legal tussles abroad. President Cristinia Fernandez de Kirchner, who is undergoing major brain injury (from which we hope she recovers), has already promised to open a new bond exchange in Buenos Aires to dodge the reach of American courts if it loses all its legal fights there.

Argentina’s spin cycle of failure continues.

[Argentinian flag courtesy of Shutterstock]

Features Icon
show comments
  • bigfire

    Still don’t see how the hold out bondholder is going to collect. At this junction, who’s going to loan Argentina money?

  • AD_Rtr_OS

    Scouring the title records in every American county as we speak.
    As we previously saw, no Argentine Government asset anywhere can be considered beyond reach of the re-po man.

  • cubanbob

    More interesting is how the court will deal our government if the Treasury and Spite House intentionally default on US bonds.

    As for Argentina they are going to have a hard time selling bonds in the future unless they pay a very high risk premium. I suppose they could force their citizens to buy them but so much with foreigners.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service