US creditors: More time needed for Argentina to seal deals

Staff Writer
Columbus CEO

NEW YORK (AP) — Lawyers for a majority of U.S. creditors settling with Argentina over longstanding debts asked a judge Tuesday to keep orders protecting them in place for at least a month while a lawyer for the South American country urged the judge to let the orders expire so Argentina can put a 15-year debt crisis behind it.

The lawyers asked U.S. District Judge Thomas Griesa in Manhattan to give them enough time that creditors holding about $8 billion in claims do not see deals reached over the last month with Argentina spoiled.

They also urged the judge to move slowly enough that existing court orders continue to pressure Argentina to settle with remaining creditors, who represent about 15 percent, or less than $2 billion of the claims that once totaled close to $10 billion.

The settlements came after a decade of litigation initiated by bondholders, including large U.S. hedge funds, who refused to trade bonds at a discount after Argentina defaulted on $100 billion of bonds in 2001.

Griesa had issued orders banning Argentina from paying interest through U.S. banks to 93 percent of its bondholders, who agreed to exchange their bonds for new bonds worth between 25 percent and 29 percent of their original value.

Argentina, through attorney Michael Paskin, asked Griesa on Tuesday to continue with a plan to conditionally let his orders expire as Argentina pays its creditors and moves aside legislative roadblocks to recent settlements.

Paskin said Argentina needed to access financial markets to raise money to pay settlements and to clear away legislative obstacles. He said the quests would be hampered by the uncertainty caused by leaving the judge's orders in place.

At worst, he added, refusing to lift the orders could threaten to "blow up the entire global settlement."

Griesa called it a "remarkable afternoon" before he reserved decision.

Among attorneys who spoke was former Attorney General Michael Mukasey, who represented a group of bondholders who were among the first to settle after Argentina announced weeks ago that it expected to pay about $6.5 billion to settle the claims protected by Griesa's orders.

Mukasey encouraged the judge to lift his orders, saying settlements had left "only a few creditors who are holding out for more."

But most lawyers representing bondholders who spoke at the hearing argued for the orders to stay in place for at least a month.

Several attorneys said they represented individual bondholders who had not yet had a chance to be represented in negotiations with a court-appointed mediator.

Attorney Michael Spencer said he represented individual and small-fund bondholders with about $800 million in claims, including a bondholder with a $10,000 note "who's very nervous."

He said his bondholders include people in Argentina who bought bonds for patriotic reasons.

"We are the people your honor has been trying to protect all these years," he said. "We're not greedy."