By Lawrence Hurley
WASHINGTON Feb 18 Argentina on Tuesday filed a
petition asking the U.S. Supreme Court to review a court order
requiring it to pay $1.33 billion to bondholders who refused to
take part in two debt restructurings from the country's 2002
The petition, which had been expected, followed a decision
by the 2nd U.S. Circuit Court of Appeals in New York on Nov. 18
to deny Argentina's petition for a rehearing.
The litigation has created concerns about a potential debt
crisis after Argentina's peso had a sharp 17-percent devaluation
in January, which sent a shudder through global markets. The
country defaulted on $100 billion more than a decade ago.
The Argentine government said through its embassy in
Washington that the court orders "threaten the well-being of
Argentina and its citizens, as well as of the countless holders
of performing Argentine debt, many of whom are U.S.
institutional investors and individuals."
In its appeal to the Supreme Court, Argentina suggested that
the high court ask the New York Court of Appeals to weigh in on
a question of how to interpret state law, based on the fact that
the bonds were issued under New York law. If the Supreme Court
were to seek the New York court's opinion, that additional legal
procedure would delay the justices' consideration of whether to
take the case.
If the justices on the top U.S. court agree to hear the
case, a decision could come between October, when the next term
begins, and June 2015, the end of the term.
Creditors holding about 93 percent of Argentina's bonds
agreed to participate in the two previous debt swaps in 2005 and
2010, which gave them 25 to 29 cents on the dollar. Other
bondholders, including hedge funds NML Capital Ltd and Aurelius
Capital Management, went to court seeking payment in full.
NML is a unit of Paul Singer's Elliott Management Corp.
"Argentina's arguments for prolonging this dispute are
without merit and entirely unnecessary. As we have stated many
times, if Argentina were willing to talk to its creditors, this
dispute could be resolved quickly," Jay Newman, a senior
portfolio manager at Elliott, said in a statement.
Argentina has refused to pay the bondholders, whom President
Cristina Fernandez has called "vulture funds."
In November 2012, U.S. District Judge Thomas Griesa ordered
Argentina to pay the $1.33 billion into a court-controlled
A three-judge panel of the 2nd Circuit upheld Griesa's order
in August, but put it on hold pending an appeal to the Supreme
Court. If the high court declines to hear the case, the appeals
court ruling would be left intact.