(Adds ex-Argentina finance secretary comment paragraphs 3-4 and
context, paragraph 10)
By Lawrence Hurley
WASHINGTON, April 21 U.S. Supreme Court justices
on Monday indicated that creditors should be able to seek
limited information about Argentina's non-U.S. assets in a case
about bank subpoenas in decade-long litigation over Argentina's
obligations to bond investors.
During a one-hour-long oral argument over hedge fund NML
Capital Ltd's efforts to seek payment of court judgments it says
are worth around $1.7 billion, several justices suggested that
military and diplomatic assets should be off-limits, which would
narrow the scope of the ruling.
Depending on how a ruling along those lines is written, it
could make it harder for NML to enforce the court judgments it
has won. Buenos Aires-based economist Guillermo Nielsen,
Argentina's finance secretary from 2002 to 2005, indicated that
the government has few commercial assets around the world.
"There is effectively nothing," he said.
A separate and more high-profile case, in which Argentina is
challenging a court judgment ordering it to pay $1.33 billion to
NML and other so-called holdout bond investors or face a
potential default if it refuses to do so, is also pending before
the high court.
During Monday's argument, the nine justices gave no
indication of where they stand on the bigger case. At one point,
Chief Justice John Roberts made it clear to NML's lawyer,
Theodore Olson, that the broader history of the litigation has
no bearing on how the court will rule.
"It seems to me that context is totally irrelevant," Roberts
said. "It doesn't matter what the basis of the underlying
The narrow legal question is whether NML, a unit of
billionaire hedge fund manager Paul Singer's Elliott Management
Corp, could enforce subpoenas against Bank of America
and Banco de la Nacion Argentina.
The South American country defaulted on its debt in 2002 and
has been in a legal battle with bondholders led by hedge funds
NML and Aurelius Capital Management, which rejected two debt
restructuring offers. Argentina argues the funds bought most of
the debt at a deep discount after the default and sought to
thwart the country's efforts to restructure.
Argentina faces falling dollar reserves, a weak economy and
high inflation, which has prompted President Cristina Fernandez
to reverse some of her more populist policies.
While the majority of justices seemed sympathetic to the
idea of NML being able to seek information, several signaled a
willingness to limit it to commercial assets.
Roberts described what NML was seeking as "pretty
extraordinary" because it could lead to creditors finding out
"how many jet fighters Argentina happens to have."
Probing further on the question of what assets creditors
could seek information on, Justice Stephen Breyer playfully
cited "marvelous Argentine beef" in a butcher's shop in Italy as
an example of the type of commercial property that NML could
Justice Antonin Scalia appeared most hostile to Argentina.
He questioned why other nations that could benefit from a ruling
in Argentina's favor had not filed court papers in support.
"Maybe Argentina owes them money as well," he said,
prompting laughter in the courtroom.
Justice Ruth Bader Ginsburg seemed more sympathetic to
Argentina's position. She made reference to creditors who had
held about 93 percent of Argentina's bonds and agreed to the
2005 and 2010 debt swaps, accepting between 25 cents and 29
cents on the dollar.
A ruling is due by the end of June.
The case is Argentina v. NML Capital, U.S. Supreme Court,
(Additional reporting by Hugh Bronstein in Buenos Aires;
Editing by Will Dunham and Grant McCool)