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