Monday, September 29, 2014
US judge Thomas Griesa declares Argentina in contempt of court, monetary fine decision postponed
New York district judge Thomas Griesa has declared Argentina in contempt of court, due to the nation's actions in attempting to change debt jurisdictions as a result of the ongoing judicial conflict with holdout investors presided over by the US magistrate.
The justice, however, deferred the imposition of financial penalties, as requested by hedge fund NML Capital in its petition to the court, for a later date.
Griesa ruled that the country had not followed the court's orders following the passing of a law which seeks to remove the Bank of New York Mellon as Argentina's financial intermediary to pay bondholders, currently unable to receive funds for debt servicing.
He went ahead with the contempt ruling despite warnings from the government to US Secretary of State John Kerry that it could constitute interference in Argentina's sovereign affairs.
The justice, however, deferred the imposition of financial penalties, as requested by hedge fund NML Capital in its petition to the court, for a later date.
Griesa ruled that the country had not followed the court's orders following the passing of a law which seeks to remove the Bank of New York Mellon as Argentina's financial intermediary to pay bondholders, currently unable to receive funds for debt servicing.
He went ahead with the contempt ruling despite warnings from the government to US Secretary of State John Kerry that it could constitute interference in Argentina's sovereign affairs.
Plaintiff bondholders, led by Elliott Management Corp's NML Capital Ltd and Aurelius Capital Management, have urged Griesa to consider unspecified non-monetary sanctions that could push the country to comply.
Those sanctions might, for instance, include barring Argentina from doing business with US banks, though such a ruling would likely engender fresh litigation over whether Griesa has the authority to do so.
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