November 9, 2012 / 6:40 PM / in 5 years

U.S. judge warns Argentina to comply with bondholder court order

NEW YORK, Nov 9 (Reuters) - A U.S. judge on Friday warned Argentina that it must comply with a recent ruling requiring it to pay bondholders who did not participate in two of the country’s major debt restructurings.

U.S. District Judge Thomas Griesa in Manhattan said that Argentina must not seek to avoid making payments to the holdout bondholders in accordance with a ruling from the 2nd U.S. Circuit Court of Appeals on Oct. 26.

“If, and I emphasize if, there is any thought on the part of the Republic to defy and evade the current ruling, then that thought should be seriously reconsidered and set aside,” Griesa said Friday.

Griesa’s comments came in response to press accounts following the 2nd Circuit ruling quoting Argentina President Cristina Kirchner as saying the country would not pay “one dollar to the ‘vulture funds’.”

The holdout bondholders include including Elliott Management Corp affiliate NML Capital Ltd and the Aurelius Capital Management funds, which owned $1.4 billion of defaulted debt.

Griesa also said he would move to quickly resolve questions of how the payments will be made by Dec. 2. Argentina is due to make the first of three payments of more than $3 billion to bondholders on that date.

The case is NML Capital Ltd et al v. Argentina, U.S. District Court, Southern District of New York, No. 08-06978.

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