Argentina fights US discovery case
Argentina, NML present arguments at US Supreme Court over asset discovery
In the latest episode of Argentina’s fight with
bondholders over its 2002 default, the US Supreme Court heard
arguments on Monday over discovery of the
sovereign’s assets in the US.
|| Source: Ryan Kelly
If the court rules against Argentina, the country would be
obliged to disclose the assets it holds in the US. That could
pave the way for the confiscation of those assets to pay
holdout creditors led by NML Capital.
The court hearing comes amid indications that the sovereign
is seeking to normalize relations with global investors.
reached a settlement with Repsol over the nationalization
of YPF and opened discussions with the Paris Club of
international creditors. It has also
borrowed in the local market and
banks globally have even pitched financing deals to the
The American Task Force Argentina (ATFA), a lobby group
representing US institutions including holdout hedge fund
Elliott Associates, on Monday said it expected the Supreme
Court rule against Argentina in the discovery case.
"The proceedings today can only be seen as a disaster for
Argentina," said Richard Samp, chief counsel at the Washington
Legal Foundation during a teleconference organized by ATFA.
"There is no question that the court is going to rule against
Argentina’s argument that it should not be subject
to post-judgment discovery." Samp said he expected eight out of
nine justices would vote against Argentina and that a decision
was likely to come before the end of June.
He also said that several of the justices presiding over the
hearing on Monday indicated that they were in favor of
permitting the discovery of Argentine assets outside the US,
The case — Republic of Argentina v. NML Capital
— is separate from a Pari Passu case, which the
Supreme Court is considering whether to accept. The Pari Passu
case centers on holdouts’ claim that
Argentina cannot only service exchanged debt, but must also
service outstanding instruments. LF