Tuesday, July 22, 2014

US Judge Griesa rejects stay request, Argentine lawyers says deal not possible by July 30 without it

US Judge Thomas Griesa rejected Argentina’s request for a suspension on the ruling that ordered Buenos Aires to pay 1.3 billion dollars plus interests to vulture funds. The country’s lawyers said a deal cannot be reached by July 30 without it. Court-appointed mediator, Daniel Pollack, called for Argentina and holdouts to meet tomorrow at 11 a.m. Argentine time for a first face-to-face encounter.

As the hearing called by US Judge Thomas Griesa with legal representatives of Argentina and lawyers of holdout bondholders in New York continues, the District Court Judge rejected the government's request saying there is no need for a stay for negotiations to continue. 

Argentina's lawyers in turn said the country simply cannot pay holdouts by the July 30 deadline set by the Judge.

Griesa said an Argentine default would be "most unfortunate" and urged the government to take “sensible steps” to avoid default. He bashed the government for its “incendiary rethoric".

“Judgments are judgments,” he said.

The meeting began at 11.30 a.m. with all eyes focused on the magistrate’s decision on Argentina’s request for a stay on the his ruling ordering Buenos Aires to pay 1.3 billion dollars plus interests to vulture funds that refused the country’s 2005 and 2010 debt swaps temporarily.

The Cristina Fernández de Kirchner administration filed a request on Monday to have a stay. The hearing was requested by European bondholders - that have not received payments from Argentina since June 30 due to Griesa’s ruling – along with the Euroclear and Clearstern financial services companies.

Other creditors with restructured bonds such as banks have also warned that the decision by the US judge to stop the payment in Europe goes against European jurisprudence, based on a similar case that Elliot Management - same vulture fund now bringing a lawsuit against Argentina- brought against Nicaragua some years ago.