La Nacion
Argentina, all or nothing before Griesa
Friday, November 16, 2012
By Martín Kanenguiser
The lights at the headquarters of the Economy Ministry were on until very late last night due to the arduous work dedicated to the presentation that the government has to make today before the judge of southern New York, Thomas Griesa, to reverse the adverse ruling in which he ordered the country to pay the bondholder that remain in default.
With a delicate balance between the need to reaffirm its previous posture, but without increasing the explosive impatience of the judge, Economy worked on a brief, in permanent contact with the attorneys representing the country, of the firm of Cleary, Gottlieb, Steen & Hamilton of New York.
The government must present a response to the request from two days ago of the holdouts to collect US$1.45 billion and, at the same time, a sworn declaration that it will comply with the orders of the judge. But as both should be coherent between them, the legal language must be very careful to defend the national position but, at the same time, not repeat concepts that, as Griesa previously has shown, show that the government does not want to honor the sentence to pay the holdouts.
The key points of the official brief will be:
* That the Court of Appeals ruling at the end of October effected an abusive interpretation of the clause of “pari passu” by granting the holdouts the same status as the 93% of the bondholders that entered the swaps of 2005 and 2010. Thus, it would elegantly elude the request by the judges and the plaintiffs to state how it would pay the US$1.333 billion determined by the Court of Appeals.
In an implicit manner, Argentina will also reject the possibility of reopening the swap – as proposed by some attorneys and financial analysts as a show of “good faith” – to pay the holdouts with a haircut. It will of course include the rejection of the option to pay them 100%, as asked for by the plaintiffs NML, Aurelius, Blue Angel and the 13 Argentine small savers (who demand US$200,000).
* That the judge must not affect the rights of third parties, like the bondholders that entered the swaps with large haircuts, nor the payment agents, like Bank of New York (BoNY), charged with transporting Argentina’s money to the United States. In this direction, it seeks to elude the possibility that American courts would block the coming payments that the country must make, reflected in the sharp drop in bond prices among those with New York legislation in recent weeks.
Argentina’s presentation will count on the very valuable contribution of the bondholders who entered the swap themselves and from BoNY, which will present their respective briefs, said sources linked to the case to LA NACION.
Last night, the Gramercy fund confirmed to the Bloomberg news agency that together with other investment funds that participated in the swap, they contracted the famous lawyer David Boies, former representative of Al Gore and the American government in glittering cases, as LA NACION reported on Wednesday.
On the other hand, Gramercy denied that it is studying with the government the possibility of accepting another place to collect other than New York, in case the stay is lifted on the case against the country. “Gramercy categorically denies having had discussion with Argentina around alternative methods of payment,” said an email written to the news agency. Of course, to publicly accept such a thing would expose them to the possibility that Griesa would accuse them of eluding the sentence.
On Monday, the holdouts will reply to Argentina’s filing and then Griesa will decide a few days later the form of payment and responsibilities of third parties. The recourse will fall to the government to seek a complex appeal before the American Supreme Court.
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