News / Americas

US Judge Orders Argentina, Creditors to Reach Deal

Jonathan Blackman, left, a lawyer representing Argentina, leaves federal court in New York, July 22, 2014.
Jonathan Blackman, left, a lawyer representing Argentina, leaves federal court in New York, July 22, 2014.
Reuters

A U.S. judge ordered Argentina and investors who did not participate in the country's past debt restructurings to meet “continuously” with a court-appointed mediator until a settlement is reached, warning of the threat of a new default.

U.S. District Judge Thomas Griesa in New York told Argentina and lawyers for investors who declined to restructure their bonds after the country defaulted on about $100 billion in 2002 that time was running out to reach a deal and avert a fresh default.

“That is about the worst thing I can envision. I don't want that to happen,” the judge said.

Jonathan Blackman, a lawyer for Argentina, Latin America's No. 3 economy, said even with around-the-clock talks, it would be “unlikely, if not impossible, to result in settlement.”

“It simply can't be done by the end of the month,” he said.

Settlement talks

Griesa ordered the parties to meet with Daniel Pollack, a New York lawyer appointed to oversee settlement talks, “continuously until a settlement is reached.” Pollack scheduled a meeting Wednesday at 10 a.m. EDT (1400 GMT).

Pollack, who was appointed June 23 as a mediator, has been holding meetings with the parties, publicly acknowledging talking twice with Argentine officials.

Argentina is sending a delegation to meet with Pollack, but a government source said Economy Minister Axel Kicillof would not be among the group.

The presidency of Argentina said in a statement that “Judge Griesa ... resolved absolutely nothing on any of the issues which had been brought before him.”

A lead holdout creditor, Elliott Management's NML Capital Ltd, said in a statement it was prepared to meet with Pollack to resolve the dispute.

“We are confident this matter could be resolved quickly if Argentina would join us in settlement discussions,” NML said.

Argentine over-the-counter dollar-denominated bonds slid following the hearing, before recovering some of the losses. The bid price on the Discount bond was down 1.1 percent on a day earlier at $86.65 at 1725 local time (2025 GMT) while the Par bond was 0.8 percent lower at $50.80.

“Clearly Argentina is running out of time,” said Ignacio Labaqui, an analyst for consultancy Medley Global Advisors. “Today is the first time I have seen the market believing that Argentina might default. It's up to Argentina to decide what it will do.”

Argentina has been pushed to the brink of a fresh debt default by U.S. court decisions that it pay $1.33 billion plus interest to bondholders who did not participate in debt swaps in 2005 and 2010. The holdouts are led by NML and Aurelius Capital Management.

The country argues paying the holdouts would open it up to as much as $15 billion in claims from other investors and further strain its financial condition.

Court request renewed

At Tuesday's hearing, Argentina renewed its request that the judge stay enforcement of his orders. Griesa said the step was not necessary, as there are “ways to do something to avoid default.”

A lawyer for Aurelius, Edward Friedman, meanwhile urged him to reconsider part of a decision last month allowing Citigroup Inc to process payments Argentina made for bonds governed by the country's local laws. Friedman said payments should not be allowed on U.S. dollar-denominated bonds.

Bank of New York Mellon Corp asked the judge to allow it to hold onto $539 million Argentina deposited last month for a payment to the restructured bondholders. Griesa previously ordered the sum returned, saying it violated his orders.

Griesa on Tuesday issued no ruling on the Citigroup issue, and told BNY Mellon and the holdouts to see if they could reach an agreement.

You May Like

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Religion Aside, Christmas Gains Popularity in Communist Vietnam

Increasingly wealthy Vietnamese embrace holiday due to its non-religious glamor, commercial appeal More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid

More Americas News

Video Washington Week: Focus on Cuba, North Korea

President Obama, lawmakers out of town for holidays but many remain transfixed with US-Cuba thaw, Sony Pictures hack
More

Health Minister Named as Haiti's New Interim Prime Minister

Announcement is part of effort to resolve a mounting political crisis over long-delayed elections
More

Kerry: US-Cuba Thaw Will Advance Interests for Both

Secretary of state says 11 million people of Cuba have waited far too long - more than half a century - to 'fulfill their democratic aspirations' and build closer ties with rest of world
More

Cuba's Famed Cigars Get a Foot in Door of US Market

Under new rules to be implemented soon, US will make it easier for some Americans to travel to Cuba and they will be able to return with $100 worth of alcohol, tobacco
More

Tourism, Farm Groups See Bigger Business With Cuba

'We are the closest major food producer that Cuba has,' an American Farm Bureau Federation spokesman notes
More

Castro Lauds US Outreach, Says Cuba to Remain Communist

In speech to lawmakers, Cuba's president says economic reforms will be accelerated, yet changes will be gradual
More