Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

For Immediate Release

Press Release

US Judge Explores Lifting Argentina Sanctions After Country Offers $6.5 Billion to Hold-Out Investors

WASHINGTON -

US District Judge Thomas Griesa ordered "hold-out" investors on Thursday to explain why various sanctions on Argentina should not be lifted. The court order comes in light of Argentina proposing a $6.5 billion settlement to the groups popularly known as "vulture funds."

"Judge Griesa is appropriately pushing the funds to take the deal," said Eric LeCompte, the head of Jubilee USA and a UN debt expert who tracked the case for six years. "The hold-out funds won and should let Argentina return to the markets. I'm surprised they haven't taken a deal that results in such massive profits."

Argentina requested the order after it made the offer to the remaining investors last week. The deal constitutes a value of 75% of the original value of the defaulted debt. Two funds, Dart Management and Montreux Equity Partners, accepted the deal. However the deal can't move forward until four other principle funds accept it. ‎The remaining hold-outs are Elliott Management, Aurelius Capital Management, Davidson Kempner Capital Management and Bracebridge Capital.

"These funds are poised to make a 1000% profit after buying the debt for pennies on the dollar," said LeCompte. "It's baffling why they wouldn't accept such a deal and Judge Griesa is starting to push them to take it."

According to Reuters who reviewed court papers, Argentina's lawyers are asking the judge to vacate injunctions that would let Argentina access capital markets to fund the settlements and force the remaining "hold-outs" to accept "reasonable terms."

The $6.5 billion offer must be approved by the remaining hedge funds involved in the dispute and then gain approval from a US judge and Argentina's legislature.

The dispute stems from Argentina's 2001 debt default. Afterwards, 92% of Argentina's investors accepted a settlement offer that restructured the South American country's debt. Among the groups that rejected the deal were a group of hedge funds that had bought Argentina's debt cheaply after the default. They sued Argentina in US courts and eventually won a ruling ordering Argentina not to pay the majority of its investors until it paid the "hold-outs" in full. During that legal dispute, the US government, International Monetary Fund and United Nations expressed opposition to the hold-outs' actions.

"On the downside, Argentina's settlement represents a validation of a predatory business model," noted LeCompte, whose organization filed a 2014 brief to the Supreme Court because it was concerned how the precedent could impact other countries. "We need financial structures in place to protect countries from this kind of behavior."

Read a timeline of Argentina's debt crisis

Read Jubilee USA's Amicus Brief to the Supreme Court

###

Jubilee USA Network is an interfaith, non-profit alliance of religious, development and advocacy organizations. We are 75 U.S. institutions and more than 750 faith groups working across the United States and around the globe. We address the structural causes of poverty and inequality in our communities and countries around the world.

Sanders Demands End to Medicare Premium Hike From Alzheimer's Drug

Biogen's original price for the controversial drug, he argues, "is the perfect example of why Medicare should be negotiating drug prices with the pharmaceutical industry."

Jessica Corbett ·


'Monumental Victory' as Biden Cancels Boundary Waters Mining Leases

Rep. Betty McCollum called the administration's decision "a rejection of the deeply flawed and politically motivated process under the Trump administration."

Brett Wilkins ·


Rights Groups Demand Hearings on the 'Fourth Amendment Is Not For Sale Act'

"The longer Congress waits," warned one advocate, "the stronger and more dangerous this industry will become."

Kenny Stancil ·


Democrats Urge Biden to Abandon Dangerous Trump Policies on Nuclear Weapons

With the Nuclear Posture Review, say congressional lawmakers, the president can ensure "future generations can finally be free from the nuclear sword of Damocles that hangs over all our heads."

Andrea Germanos ·


'There Is No Military Solution': Jayapal, Lee Demand Diplomacy on Ukraine

"We call upon our colleagues to allow the administration to find a diplomatic way out of this crisis," said the progressive Democrats.

Jake Johnson ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.


Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo