May 7 Holders of Argentine sovereign debt on
Wednesday asked the U.S. Supreme Court not to hear that
country's appeal of lower court decisions ordering it to pay
them $1.33 billion in a case Argentine officials warn could
force it to default on its sovereign debt.
Wednesday's filing, which came in response to Argentina's
petition in February to be heard by the highest U.S. court, was
made by a group of so-called "holdout" bondholders who refused
to accept Argentina's two debt-restructuring offers after the
country defaulted on $100 billion in 2002.
Argentina is seeking to reverse the rulings that say the
country must make full payment to the group, which is led by
hedge funds Aurelius Capital Management and NML Capital Ltd, a
unit of billionaire Paul Singer's Elliott Management Corp.
In Wednesday's court filing, lawyers for the bondholders
called the case "undeserving of review," knocking Argentina's
position that the lower court violated the Foreign Sovereign
Immunities Act by allowing for the arrest in the U.S. of
property belonging to a foreign state.
The lower ruling, in the U.S. Second Circuit Court of
Appeals, "does not exercise dominion over any sovereign
property," the bondholder group said, "but merely holds
Argentina to its commitment to treat its debts to [the
bondholder group] equally with its other obligations."
The group added that Argentina may wind up ignoring any
court ruling anyway.
"By Argentina's lights, it has the final word," the group
said, which is "reason enough" not to hear the case.
A group of former U.S. federal judges, including Michael
Mukasey and Michael Chertoff, who served respectively as
Attorney General and Secretary of Homeland Security under former
President George W. Bush, also urged the Supreme Court not to
hear the matter. In a so-called "amicus" brief, the former
judges, who are not parties in the case, suggested Argentina is
trying to "undermine the authority of judicial proceedings" by
saying it won't comply with adverse rulings.
"Argentina has put itself in the position of a fugitive from
justice who eludes law enforcement authorities while seeking to
press an appeal," said the judges.
Argentina has said the bondholder group tried to profit by
buying its debt at a deep discount after its default, then
attempting to thwart the country's efforts to restructure
through debt swaps.
Creditors holding about 93 percent of Argentina's bonds
agreed to participate in the swaps, in 2005 and 2010, accepting
between 25 and 29 cents on the dollar.
The outcome of the closely watched case could impact future
sovereign debt restructurings. The Supreme Court justices are
likely to have a first look at whether to take the case sometime
The case is Argentina v. NML, U.S. Supreme Court, No.
(Reporting by Nick Brown and Lawrence Hurley; Editing by Eric