(Adds Argentine Economy Minister Kicillof speaking at U.N., 7th paragraph)
By Daniel Bases
NEW YORK, June 24 (Reuters) - Holdout investors in Argentine sovereign debt said on Tuesday they would discuss an accommodation to let the government pay other bondholders facing a potential default, if negotiations to settle the legal dispute have made good progress before July 30.
Lawyers representing the holdout investors, led by Elliott Management's NML Capital Ltd and Aurelius Capital Management, also said in a letter to U.S. District Judge Thomas Griesa there were no grounds to grant Argentina's request to reinstate a suspension of his order to make payment.
A bond payment of $900 million is due next Monday to investors who participated in two prior restructurings on the same terms in 2005 and 2010. There is a 30-day grace period before an actual default can be declared if there is no payment.
"If as July 30 approaches the parties have made good progress but more time is needed, and Argentina has not taken action to evade the Amended February 23 orders, Argentina and the Plaintiffs will both have a strong motivation to work out a consensual accommodation, on mutually agreeable terms," Robert Cohen of Dechert, lead counsel to the holdouts, said in the letter to Griesa.
Cohen went on to say this would allow the settlement process to continue, allow Argentina to make the payment to exchange bondholders within the grace period and give his clients protections and compensation for the risk that the settlement effort fails after Argentina makes its payment.
On Monday, Griesa appointed New York financial trial lawyer Daniel Pollack as a special master to assist in the negotiations.
Argentina's Economy Minister Axel Kicillof is due to speak at the United Nations in New York on Wednesday about the debt situation, Argentina's U.N. Ambassador Maria Cristina Perceval told Reuters. It is unclear if Kicillof will also meet with holdout investors and/or Pollack.
Argentina's lawyers on Monday asked Griesa to suspend his order, which would force the nation to either pay holdouts at the same time it makes a payment on restructured debt or be barred from paying anyone - thereby creating a technical default even though it has the cash to cover its debt.
Griesa's order was upheld after the U.S. Supreme Court on June 16 denied the government's request to hear an appeal on the injunction put on financial institutions from transferring payments by the government through the U.S. banking system.
The plaintiffs, who have waged battle with Argentina in the New York courts, won a 2012 judgment for $1.33 billion. They claim in the letter to Griesa that with past due interest, the award would be approximately $1.65 billion by June 30.
Argentina claims that if it pays the holdouts it would face a potential demand of up to $15 billion from other holdouts not involved with the case, an amount representing more than half of the government's $28.5 billion in foreign currency reserves.
Analysts say the $15 billion figure appears too high, however. Moody's Investors service said the claims could rise to $7.5 billion if all the unrestructured debt under New York law are now claimed. That figure rises to $12 billion, Moody's said, if all holdout claims in U.S. dollars and euros were to seek payment.
Roughly 93 percent of the bondholders who owned the approximately $100 billion in sovereign debt that Argentina defaulted on in 2001-2002 accepted the restructuring for less than one-third the original value of the bonds. (Additional reporting by Jonathan Stempel and Louis Charbonneau; Editing by Tom Brown)