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U.S. will not file with Supreme Court in Argentina debt case
WASHINGTON |
WASHINGTON (Reuters) - The United States will not file a brief next week asking the U.S. Supreme Court to review Argentina's case in a decades-old battle between the South American country and "holdout" creditors, a Justice Department spokesman said on Friday.
Over the last decade, holdout investors and Argentina have sparred in the U.S. courts over the South American country's $100 billion default in 2002. Holdouts declined to take part in two restructurings in 2005 and 2010 that drew participation from 93 percent of bondholders, who accepted returns as low as 25 cents on the dollar.
Argentina is asking the Supreme Court to void an October 2012 ruling by the 2nd U.S. Circuit Court of Appeals in New York, which found it had violated a clause in its bond documents requiring it to treat all creditors equally.
The appeals court has not yet ruled on whether to require Argentina to pay the holdout bondholders. A ruling in their favor would put Argentina on the hook for more than $1.3 billion in payments and risk the country's default.
The Supreme Court decides to hear less than 1 percent of the thousands of petitions that are filed each year.
The Supreme Court generally gives more weight to requests from the government than it does other parties, but the Justice Department rarely files friend-of-the-court briefs before the court has decided to hear a case, unless the justices ask it to.
"I am only aware of a couple instances where it has done so in the past 15 or 20 years," said John Elwood, a lawyer in Washington who formerly worked in the Justice Department.
The International Monetary Fund plans to file a brief in support of the case next week, by the court's July 26 deadline, if it gets approval from its board. In a paper, the IMF said a ruling against Argentina could have broad implications for future sovereign debt restructurings.
The Supreme Court is on its summer break and won't decide whether to hear the case until the fall.
(Reporting by Lawrence Hurley and David Ingram, Writing by Anna Yukhananov; Editing by Eric Beech)
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Asking to be rescued by the courts of nations of law is tantamount to a hiker who wants to be “out in the wild exposed to nature” then calling for help from civilization to rescue her when she gets in trouble. In South America, with rare exception, you pay your money, and you take your chances that a “Hugo” of some nationality and gender won’t give you a “hair cut” (possibly a buzz cut) for the good of “The People.”
I agree. The penalty for default is you lose credit rating and no one should invest with them again. Investments and loans carries risk, the bondholders should have been well aware of the risk of default. They should not be going to the supreme court to get their money back.





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