For Immediate Release
While Argentina Team Prepares to Face Bosnia, Government Fights Hedge Funds at US Supreme Court
WASHINGTON - While Argentina prepares to face Bosnia Sunday in the first round of the World Cup, the South American soccer power faces a second major contest in a very different venue. The United States Supreme Court will announce in June if it will hear Argentina vs NML Capital that impacts the operation of the global financial system. The Financial Times has called the case the "Debt Trial of the Century."
"If Argentina loses at the Supreme Court, not even the great Lionel Messi will be able to reverse the damage," said Eric LeCompte, Executive Director of Jubilee USA, a religious anti-poverty organization. "The stakes are high in this World Cup of debt and Argentina fans are watching the US Supreme Court as much as they are watching Brazil."
The case dates back to Argentina's 2001 default. While nearly 93% of the country's creditors agreed to a deal with Argentina to restructure its debts, a small group of hold-outs refused the deal and sued. This group included hedge funds that specialize in purchasing the distressed debt of impoverished countries and then suing to claim assets freed up to support poor populations through debt relief. Because these funds purchase debt for pennies on the dollar and then litigate to collect when a country is making a recovery or has assets from debt relief earmarked for the poor, these hedge funds are popularly referred to as "vulture funds."
"Argentina has a much bigger problem than anything it will face in Group F," added LeCompte, who works on four United Nations expert panels on debt and human rights. "These predatory hedge funds threaten to throw Argentina into default."
This week, a delegation of Argentine lawmakers arrived in Washington to thank the Obama Administration and US government for their support. In an allusion to the World Cup, Argentine Lower House Speaker Julian Dominguez presented US Congressman Xavier Becerra with a Lionel Messi jersey.
Numerous countries participating in the soccer tournament have connections to the Argentina/hedge fund dispute. France, Mexico, Brazil and the United States have filed briefs on behalf of Argentina at either the Supreme Court or the appeals court level. Ghana temporarily seized an Argentine ship for the hedge funds then released it after an order from the supreme court of Ghana. German courts have ruled in Argentina's favor in related lawsuits and Belgium and the United Kingdom have passed laws restricting these hedge funds. Honduras and Cameroon are among the countries that have been sued by these types of hedge funds. Representing 79 US Religious and Development organizations, Jubilee USA filed to the Supreme Court urging it to take the case because a court precedent will impact people living in extreme poverty.
"The Supreme Court's decision could equip predatory funds with a precedent that traps countries in poverty," added LeCompte. "There are two things most of the world agrees on, soccer is fun and exploiting poor people for profit is wrong."
Jubilee USA Network is an alliance of more than 80 religious denominations and faith communities, human rights, environmental, labor, and community groups working for the definitive cancellation of crushing debts to fight poverty and injustice in Asia, Africa, and Latin America.