Supreme Court Decides to Hear Argentine Objection to Predatory Hedge Funds Targeting Argentine Assets Outside of United States

Ruis, gepost door: nn op 13/01/2014 01:08:47

Wanneer: 13/01/2014 - 20:13

The Supreme Court will review a lower court's order for banks to give information on Argentine assets, including those assets held outside of US jurisdiction, to a group of hedge funds seeking to collect from Argentina's 2001 default. Additionally, the High Court will review if it is legal for these predatory hedge funds to target assets for collection outside of a US jurisdiction.

The Supreme Court will review a lower court's order for banks to give information on Argentine assets, including those assets held outside of US jurisdiction, to a group of hedge funds seeking to collect from Argentina's 2001 default. Additionally, the High Court will review if it is legal for these predatory hedge funds to target assets for collection outside of a US jurisdiction.

"This is good news for countries around the world. The Supreme Court’s action could make it less profitable for hedge funds to engage in predatory behavior," noted Eric LeCompte, Executive Director of the religious antipoverty campaign, Jubilee USA. "In a few months, the Supreme Court will consider a more important appeal related to this case that will impact the world's poorest countries."

Argentina is expected to appeal to the US Supreme Court by mid-February in response to a US 2nd Circuit Court ruling ordering the country to pay $1.33 billion to predatory hedge funds. The precedent the case sets will hurt poor countries in financial distress and could allow a small group of hedge funds to target assets that benefit vulnerable populations. At the same time, debt holders who restructured their debt with Argentina have hired lawyers to help negotiate the dispute between holdout hedge funds and Argentina. Nearly 93% of debt holders restructured their debt with Argentina after the 2001 default. The majority of bondholders are concerned that their settlements could be disrupted if hedge funds win the final ruling.

"We agree with the concerns of the restructured bondholders," said Eric LeCompte, "We join the IMF, World Bank and White House in denouncing this extreme hedge fund behavior that takes advantage of the world's poorest people."

Once Argentina appeals to the Supreme Court, interested parties have 30 days to file an amicus or friend-of-the-court brief urging the Supreme Court to accept the case. The Supreme Court would likely decide by the summer whether or not it will actually hear the case. In a separate case currently before the Supreme Court, Argentina sought review of a lower court decision allowing NML Capital to seek information about Argentina's non-US assets. The United States filed an amicus brief in support of Argentina, arguing that Argentina's assets are immune from seizure under federal sovereign immunity law.

These cases go back to 2001, when Argentina defaulted on roughly $81 billion in debt. Multiple hedge funds purchased debt for pennies on the dollar. These hedge funds are called "vulture" funds because they prey on countries in financial distress and target assets that benefit poor populations. The nearly 93% of bondholders who restructured their debts with Argentina have seen the value of their bonds increase. The holdout hedge funds that are suing Argentina refused the deal several times and have instead sued for the full amount of the debt they purchased.

The opposition to vulture funds is widespread. Similar hedge fund claims against Argentina have been rejected by courts in Germany, and France filed an amicus brief in support of Argentina in a previous appeal to the Supreme Court. In lower court proceedings, the US government filed an amicus brief in support of Argentina, arguing that a ruling against Argentina could make it much more difficult for countries in financial recovery or facing economic stress to access credit and debt swaps. The IMF has also weighed in on the case, saying that the result would have major implications for how future sovereign debt is restructured.

"It's rare that we see such a global consensus rejecting this predatory hedge fund behavior. These hedge funds hurt legitimate investors and poor people," noted LeCompte.

Jubilee USA Network is an alliance of more than 75 US organizations, 300 faith communities and 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org


Global IMC Network www.indymedia.org Afrika Ambazonia Canarias Estrecho / Madiaq Kenya South Africa Canada London, Ontario Maritimes Quebec Oost Azië Japan Manila QC Saint-Petersburg Europa Abruzzo Alacant Antwerpen Athens Austria Barcelona Belarus Belgium Bristol Brussels Bulgaria Calabrië Cyprus Emilia-Romagna Estrecho / Madiaq Euskal Herria Galiza Duitsland grenoble Hungary Ireland Istanbul Italy La Plana Liege liguria Lille Linksunten Lombardia London Madrid Malta Marseille Nantes Napoli Netherlands Northern England Norway Nottingham Oost-Vlaanderen Paris/Île-de-France Piemonte Poland Portugal Roma Roemenië Russia Scotland Sverige Switzerland Torun Toscana Ukraine UK-GB Latijns Amerika Argentina Bolivia Chiapas Chile Sur Braszilië Sucre Colombia Ecuador Mexico Peru Puerto Rico Qollasuyu Rosario santiago Uruguay Valparaiso Venezuela Oceanië Aotearoa Manila Melbourne Perth QC Sydney Zuid-Azië India Verenigde Staten Arizona Atlanta Austin Baltimore Big Muddy Binghamton Buffalo Charlottesville Chicago Cleveland Colorado Columbus DC Hawaii Houston Hudson Mohawk LA Madison Michigan Milwaukee Minneapolis/St. Paul New Mexico New Orleans NYC Philadelphia Pittsburgh Portland Richmond Rochester Rogue Valley San Diego San Francisco Bay Area Santa Cruz, CA Sarasota Seattle Urbana-Champaign Worcester West Azië Beirut Israel Palestine Process FBI/Legal Updates Mailing Lists Process & IMC Docs Projecten Print Radio Video Regio's United States Topics Biotech