WASHINGTON, July 19 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.