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U.S. top court to consider hearing Argentina bonds case
September 11, 2013 / 9:33 PM / 4 years ago

U.S. top court to consider hearing Argentina bonds case

WASHINGTON (Reuters) - The U.S. Supreme Court will meet behind closed doors on September 30 to decide whether to hear a high-profile appeal by Argentina over its battle with hedge funds that refused to take part in two debt restructurings that sprang from the country’s 2002 default.

People line up for admission at the U.S. Supreme Court in Washington October 1, 2012. REUTERS/Gary Cameron

Argentina has appealed an October ruling by the 2nd U.S. Circuit Court of Appeals in New York in which the court said the government had broken a contractual obligation to treat bondholders equally.

In two restructurings, in 2005 and 2010, creditors holding around 93 percent of Argentina’s debt agreed to participate in debt swaps that gave them 25 cents to 29 cents on the dollar.

But bondholders led by hedge funds NML Capital Ltd, a unit of Paul Singer’s Elliott Management Corp, and Aurelius Capital Management went to court, seeking payment in full.

If the justices on the nine-member court agree to hear the case, the court would make an announcement the day after the private conference. The court would then schedule oral arguments and the case would be decided sometime before the end of June 2014.

If the court decides against hearing it, this would be made public on October 7, the first day of the court’s new term. The court also has a third option of asking the Obama administration to weigh in on whether it thinks the case merits the justices’ attention, which would delay any further action.

The legal waters are further muddied by the fact that the appeals court in New York subsequently issued another ruling on August 23 in the same dispute. The court upheld a lower court’s order that Argentina pay the bondholders $1.33 billion. The court stayed its decision pending Supreme Court review. Argentina also has asked the appeals court to reconsider its decision.

The case now before the Supreme Court is Argentina v. NML Capital, 12-1494.

Reporting by Lawrence Hurley, additional reporting by Nate Raymond; Editing by Howard Goller and Phil Berlowitz

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