(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Alison Frankel
NEW YORK, June 30 Argentina continues to search
for a tenable position in its war with the hedge funds it's due
to pay about $1.65 billion by July 30, under rulings affirmed
earlier this month by the U.S. Supreme Court.
Late last week, after previously suggesting that it would be
open to negotiations with the hedge funds to avert a default on
its restructured debt, Argentina deposited about $530 million
with the Bank of New York Mellon to pay exchange bondholders,
seemingly in defiance of U.S. court orders, then threatened to
bring an action in The Hague against the United States and U.S.
District Judge Thomas Griesa of Manhattan for violating
On Friday, at the latest hearing in this mess, Griesa
refused to grant Argentina a stay of the injunction requiring it
to pay the hedge funds at the same time it pays exchange
bondholders. He told BNY Mellon to return the $530 million
deposit from Argentina, which he said was an "improper"
violation of his orders. (Argentina said it is caught between
competing Argentine and U.S. legal directives.)
Griesa, who has twice returned from vacation to preside over
emergency hearings in the last two weeks, was so impatient with
Argentina's brinkmanship that he also on Friday finally
threatened contempt of court for anyone who attempts to evade
But Griesa once again seemed to go out of his way to spare
Argentina's lawyers at Cleary Gottlieb Steen & Hamilton from his
ire. As I've reported in previous columns, the holdout NML
Capital has specifically targeted Cleary along with its client,
arguing that the law firm advised Argentina on a plan to shift
payments to exchange bondholders out of the reach of U.S.
courts, and then misrepresented Argentina's intentions to both
the U.S. Supreme Court and Judge Griesa.
NML counsel Robert Cohen of Dechert kept up that drumbeat on
Friday, again arguing to Griesa that Cleary had made assurances
to the judge that had not panned out. Cleary had assured Griesa
that Argentina wouldn't violate his orders, but Argentina
promptly did, Cohen said.
'FAIR AND SQUARE'
Griesa wasn't buying it. He chided Argentina's lawyer
Carmine Boccuzzi of Cleary for requesting a stay in letters to
him rather than in a formal motion, but in the same breath
complimented Boccuzzi and Cleary partner Jonathan Blackman on
their skills. More significantly, he said later in the hearing
that he has no problem with the actions of the Cleary lawyers.
"I want to say this to Mr. Boccuzzi and Mr. Blackman,"
Griesa said. "I've had trouble, and I've expressed it, with the
Republic. But both of you have been fair and square in every way
before me, and I appreciate that."
The Argentina debacle won't be solved before next week at
the earliest. Despite Griesa's urging, Argentine officials still
have not sat down for talks with the hedge funds and the
Griesa-appointed special master. On Monday, NML senior portfolio
manager Jay Newman issued his first public statement on the
crisis: "NML is at the table, ready to talk, but Argentina has
refused to negotiate any aspect of this dispute," he said.
"There are no negotiations under way, there have been no
negotiations, and Argentina refuses to commit to negotiations in
the future. Argentina's government has chosen to put the country
on the brink of default. We sincerely hope it reconsiders this
I'm sure that Cleary's priority right now is Argentina's
imminent default, not Judge Griesa's regard for the firm. But it
must be nice for the firm to know that the judge doesn't hold
Cleary responsible for its client's defiance.
A Cleary spokeswoman declined to comment.
(Reporting by Alison Frankel; Editing by Andrea Evans)