La Nacion Debt: Belgian court rejects request that payments in Europe not be affected

La Nacion

Debt: Belgian court rejects request that payments in Europe not be affected

Bondholders had requested to keep collecting faced with an eventual adverse ruling for Argentina

 

by Luisa Corradini  | LA NACION

 

PARIS.- A Belgian court yesterday rejected the request by European bondholders that participated in the swaps pushed by Argentina to have an eventual ruling against the country in New York not impede the collection of debt in Europe.

 

The ruling of the Commercial Court was announced yesterday to LA NACION by the secretary of the jurisdictional courthouse, with the laconic “the presiding judge declared the request to be inadmissible,” without giving details about the reasons behind the decision.

 

The request of the bondholders had been announced in New York by Latham & Watkins, the international firm that represents them, with the goal of the Belgian court adopting an injunction that would oblige Bank of New York Mellon Brussels, Euroclear and Euroclear Bank –located in Belgium – to continue honoring payments on bonds issued by Argentina in the swaps of 2005 and 2010, denominated in euros.

 

In a letter sent at the beginning of the month to Catherine O'Hagan Wolfe, secretary of the U.S. Court of Appeals, the legal representatives of that group of European bondholders asked that court to abstain from issuing an order that would reach entities that are not in U.S. jurisdiction, at the time of deciding on the pertinence of the pari passu order issued by New York Judge Thomas Griesa.  The U.S. Court of Appeals  should decide soon if it upholds Griesa’s order or not.

 

In the letter sent to O'Hara Wolfe, the European bondholders warned that the extension of a ruling upon Bank of New York and Euroclear in Belgian territory “could contravene a definitive decision of a Belgian court in the establishment of an order on the plaintiffs according to Belgian law, violating the clearly established princiople.”  It’s evident that the Belgian Commercial Court didn’t follow that line of argument.

 

The European bondholders that, on the contrary, didn’t accept the swap with Argentina believe that the complaint filed in Belgium has overtones of a “maneuver” with the goal of dividing the creditors of Argentina and, above all, to “influence” the decision of the U.S. appeals court judges.

 

"It’s difficult to imagine how simple European citizens could have had the initiative of this action.  It’s the Argentine state that is behind this maneuver,” said Gianfranco Lucifora from Rome, representative of the small Italian bondholders.  

 

"It’s also difficult to comprehend how the Belgian courts could make a decision in Brussels if that jurisdiction is not scheduled for an Offering Circular relative to the new bonds,” he concluded.