UK court says English law applies to euro-denominated Argentine debt

[forest444]

Buenos Aires Herald
February 13, 2015

A London court today ruled English law applies to a disputed case involving interest payments on euro-denominated Argentinian debt, making a payout more likely in spite of conflicting orders from a US court.

The case was brought by a number of investment firms after a US court ruled payments should be halted until a deal was reached between other creditors and Argentina on a payout, following the country's sovereign debt default in 2002. Claimants included Quantum Partners, the fund run by George Soros; and funds Knighthead Master Fund LP, RGY Investments LLC, and Hayman Capital Master Fund LP.

The London court case involves 225 million euros ($257 million) held under English trust law by trustee Bank of New York Mellon after the money was transferred by Argentina on June 26, 2014. In response to the ruling by Justice David Richards on Friday, Reynolds Porter Chamberlain, lawyers for the claimants, said they were "very pleased" and that the ruling was a significant step forward in the defence of their interests. "They have been deeply concerned that their legitimate English law proprietary interests in the payments have not been taken into account in the on-going U.S. litigation," RPC said in a statement.

"They now hope that this Declaration can be brought to the attention of the appropriate Courts at the first available opportunity and that those Courts will have regard to the decision of the English Court."

At: http://buenosairesherald.com/article/181926/uk-court-says-english-law-applies-to-eurodenominated-argentinian-debt
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Good news for bondholders: vulture funds can now only hold bondholders' payments hostage in Wall Street's easily-bribed kangaroo courts. No one else will give them the time of day.

No one has a right to intercept bondholder payments - least of all vulture funds, many of which are Caribbean laundries.

The big picture, I think, is this: London is the new natural home for the world's bond markets. The rest is just a matter of time.

[pscot]

1. Here's a gloss

A New York court has awarded two US vulture funds a $1.3 billion payout on debts bought up after Argentina’s debt crisis of 2001. What’s more, Argentina has been told it is ILLEGAL to pay its other debts unless it also pays the vultures.

With a $900 million payment due on 30 June (plus a 30 day grace period), Argentina is being forced towards a new debt default.

Debt scavengers

The vulture funds bought up billions of dollars worth of Argentina’s debt in the early 2000s when the country’s economy was on its knees and its people were suffering horrendous poverty. Defaulting on its debts was the only option. 93% of lenders agreed to reduce Argentina’s debt burden, and the country’s economy has recovered. But vulture funds have spent more than a decade demanding the full amount plus interest and penalties. The decade-long legal battle has been called the ‘debt trial of the century’.

http://jubileedebt.org.uk/actions/support-argentinas-fight-against-vulture-funds

[forest444]

2. The backgound saga. Thank you for that!

I would add to that, that in the case of the lead vulture (Paul Singer and his Cayman Islands laundry, NML) the bonds were bought in 2008 - 6 years after the default. They were apparently sold in a moment of panic by another holdout, Mark Botsford - who's still bitter he didn't accept the 2005 swap (he would have more than doubled his money by now). Singer, moreover, held CDS insurance against those Argentine bonds for up to a billion (which, thanks to Griesa, he was able to collect on last August).

This is the same chicanery that forced Caesar's Entertainment into bankruptcy, and that other vulture funds trying against Greece now.

In our topsy-turvy world, where debtors were once only taken to court by bondholders to collect, now they're taken to court to stop them from paying others. Would that Kafka were still around, no?

[Judi Lynn]

3. Great news, unexpectedly! Thank you for providing it here. n/t

[forest444]

4. And yes, British courts have proven themselves incorruptible where vulture funds are concerned.

Call it enlightened self-interest: it's not only the lawful -and right- thing to do by Argentina and its bondholders (who've been collecting since 2005, and have actually made money), it's a clear message to bond issuers around the world that London, not New York, is the new natural home for global bond markets. The rest is really just a matter of time.

When New York loses its bond market supremacy, they'll have these Caribbean laundries and their (bribed?) monkey, Judge Griesa, to thank for that.

[Peace Patriot]

5. Thank you very much for this post, forest444!

FINALLY, some judicial sanity enters this situation!