Sunday, June 29, 2014

Argentina Is Not Standing Down: "We've Paid our Debts"—Judge Griesa Has Abused His Authority

New York Federal Judge Thomas Griesa, and lawyers for the NML and Aurelius vulture funds went bonkers Friday over Argentina's bold June 26 action, depositing $539 million in the account of its trustee, Bank of New York-Mellon (BONY), held in its Central Bank, designating those funds as payment only to bondholders holding restructured debt.

See LPAC's page: "A Case Study In Sovereignty: Argentina & the Bankruptcy of the Financier Oilgarchy"

Monday is the deadline for payment of $900 million to bondholders, although Argentina has a 30-day grace period before being declared in technical default.

At a hearing in Manhattan Friday morning, Judge Griesa attacked Argentina for taking "explosive action" which "disrupted" potential negotiations with the speculative vulture funds. "This payment is illegal and will not be made," he bellowed, while vulture fund lawyers shrieked that Argentina must be held in contempt for disregarding Griesa's ruling to pay both bondholders and vulture funds. Griesa warned that anyone — obviously including BONY — attempting to skirt his rulings "will be in contempt of this court." He ordered BONY to immediately return the funds to the Argentine Republic, and told lawyers for both parties they must continue to "negotiate" a solution.

Argentina is pushing back against this insanity, in ways that are unnerving the enemy. In a statement released Friday, entitled "Argentina Pays: Griesa Prevents Bondholders from Collecting," Finance Minister Axel Kicillof shot back that the judge's actions are "outrageous and without precedent." Outrageous because "we're talking about funds that no longer belong to Argentina, but rather to third parties. Unprecedented because a judge is trying to prevent a debtor from meeting its obligations and creditors from collecting." Kicillof accused Griesa of forcing Argentina to violate contracts it signed as part of the 2005 and 2010 restructuring.

Argentina has met its obligation to pay, Kicillof said. The New York judge has engaged in "abuse of authority and overstepped his jurisdiction," he charged, because in fact, the restructured bonds are not, and never were, the subject of litigation, and the judge has no authority to rule on them. The only ones at issue are the defaulted bonds from the fraudulent 2001 "mega-swap," which the vultures bought for pennies on the dollar in order to make a killing later on, he said.

Thus, "the Argentine Republic reaffirms its commitment to honor its obligations and allow its creditors to collect," the statement concludes.