deal risk....

Dear Clients,

  We are writing to bring you up to date on our cases.  As you probably know, the four large hedge funds led by NML-Elliott settled with the government on Feb. 29 for 75% of claim value plus attorney fees.  Their bonds were subject to Equal Treatment injunctions.  Judge Griesa “vacated” (took away) the injunctions on March 2.  We argued that he had no good reason to do that, and he should have given us at least another month to negotiate with the government.  He and the Special Master want to put pressure on you to settle quickly and at the “public” offer amounts (face value +  50% for all bondholders, or 70% of claim value for bondholders holding Equal Treatment injunctions).  We were mostly prevented from negotiating with the government as soon as possible.

  The court’s decision is very biased, and we have appealed.  We believe there is a good chance the Second Circuit appellate court will agree with us and reinstate the injunctions.  If that happens, the existing settlements will probably fall apart, there will be financial chaos for Argentina, and perhaps better settlement terms will be offered to us.   Argentina is taking a big risk if it does not offer us good settlement terms before that time.  Our appeal to the Second Circuit will likely be heard in early April.  The NML-Elliott settlement must close (the money must be paid to the hedge funds) by the deadline of April 14.

  We understand that you are seeing media reports that the government is winning.  However, the government officials are not taking into account their political risk in the Congress and the legal risk that the Second Circuit will reverse Judge Griesa’s vacatur of the injunctions.  We continue to believe that the government will offer us better terms than the “public” terms described above.

 Thank you.

Sincerely,