Argentine mess will test 84-year-old Judge Griesa
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An attorney for Argentina Carmine Bocuzzi, center, arrives at US District Court in Manhattan on Friday.Photo: Getty Images
A Manhattan federal judge who is trying to force Argentina to pay its debts must be feeling the heat as the case grows increasingly chaotic.
Thomas Griesa, who has presided over 11 years of contentious litigation between Argentina and bondholders demanding to be repaid in full on defaulted debt, is suddenly grappling with a host of complex issues while the country careens toward another default.
So far, Griesa has refused to stay his order requiring Argentina to pay hedge fund mogul Paul Singer and other holdout bondholders the full $1.65 billion they are owed when it makes payments to exchange bondholders, who agreed to a debt swap of lesser value.
Argentina has until July 30 to pay up without triggering a default.
Griesa has been urging the two sides to negotiate a settlement before the deadline, but the talks have gone nowhere.
When Argentina’s lawyer once again pressed for the stay in court Tuesday, as he explained several thorny issues to be resolved, Griesa was unmoved.
“Every single problem you are talking about is susceptible of being handled in some way in a settlement,” Griesa said.
The 84-year-old judge seems to be banking on Argentina caving at the last minute, as he has yet to rule on a slew of complicated issues, including whether Argentine bonds denominated in euros, yen and Argentine pesos should also be subject to his orders.
The case grew even murkier this week when Citibank notified Griesa that exchange bonds it holds — which are subject to his order — are fungible with other Argentine debt at the bank, making it impossible for Citi to separate the two.
During the Tuesday hearing, Griesa changed his mind mid-stream about whether Bank of New York Mellon has to return the $539 million it received from Argentina to make the payment to exchange bondholders, telling BoNY at first to hold onto it. After lawyers for the holdouts objected, he deferred ruling on the matter.
Meanwhile, a default is looking increasingly likely.
Argentina representatives left New York on Friday after meeting for an hour with a court-appointed mediator, sending Argentine bonds tumbling.
In a statement, Argentina said “different alternatives available were analyzed in depth” and added that “the process of dialogue with the [mediator] will continue in the upcoming days.”
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