News of the Obvious: NML et al. Oppose the Stay

News of the Obvious: NML et al. Oppose the Stay

posted by Mark Weidemaier

Yesterday's post noted that, by asking Judge Griesa to re-impose a stay of the injunction, Argentina was effectively asking for permission to pay exchange bondholders on June 30 without making any payment whatsoever to NML and the other plaintiffs. Not surprisingly, plaintiffs oppose the motion. (Here's their response.) The parties held a telephone conference today with the judge, so I would expect a ruling soon.

Argentina needs time to fashion a global resolution that will encompass potential "me too" claimants. But after years of litigation (and a stay of more than two years), extra time may not come for free. As I suggested in an earlier post, if Argentina needs more time and wants to avoid default on the exchange bonds, it might need to pay plaintiffs to extend the stay. In their response to Argentina's stay request, Plaintiffs also raise this possibility, noting that any agreement would have to "provide Plaintiffs with suitable protections and compensation for the risk that the settlement effort will fail." So, we will see. I am skeptical that Judge Griesa will grant the stay, and even more skeptical that he will grant it without imposing any conditions. At this point, he has every reason to keep the pressure on Argentine officials so as to give urgency to the settlement talks. If a stay proves necessary, and the parties cannot agree to one, he can always reconsider his decision. Conceivably, he might even condition a stay on Argentina providing some compensation to plaintiffs. That would raise interesting questions under the Foreign Sovereign Immunities Act - since the order would condition relief on Argentina's parting with immune assets - but I don't think it is obviously beyond the scope of the judge's power.