Griesa says Argentina’s swap plan is illegal
Judge orders Argentina to engage in talks with holdout creditors and says he hopes an agreement will be reached soon
US District Judge Thomas Griesa has ordered Argentina not to
proceed with a plan to swap restructured bonds under New York
law for local paper saying the deal would be "illegal".
||Argentina's Congress (David Berkowitz)
Instead, Judge Griesa urged the Argentine government and
holdout creditors to continue negotiating with court appointed
mediator Daniel Pollack. Argentine state-run media reported
Griesa as saying he was confident that the parties will reach
an agreement "sooner rather than later".
"The Judge is insisting that the Argentine Republic must
negotiate and he refuses to see that, in fact, the ones that
aren´t negotiating are the vulture funds … Far
from dispensing justice and generating balanced conditions, the
Judge just wants to help the vulture funds," the Argentine
finance ministry said in a statement on Friday.
Argentina's voluntary swap proposal is seen as a last-ditch
attempt to circumvent Griesa's order calling for the country to
pay holdout creditors led by NML Capital around $1.5bn before
servicing restructured debt. The order effectively barred
Argentina from making a payment to restructured bondholders in
late June, which meant that the country was declared in default
on July 30.
Meanwhile, Griesa rejected a request by holdout creditors that
Argentina should be declared in contempt of court for making
the swap proposal.