advertisement

Argentina signs deal to close US class action suit over defaulted debt

[JURIST] Argentina and US bondholders on Tuesday settled a class action lawsuit over defaulted debt from 2001. According to the court appointed monitor, Daniel Pollack, creditors who participate would receive 100 percent of the principal owed [Buenos Aires Herald report] and 50 percent of the interest owed on that principal. The exact number of bondholders that are covered under the class action settlement will not be known for several weeks. On February 5, the nation of Argentina offered [Reuters report] $6.5B to settle its $100B debt obligation. Pollack stated that Tuesday's settlement "fits within the numbers" of the proposed offer. Two of the six leading bondholders have accepted the terms of the offer.

Litigation related to Argentina's 2001 debt default has continued for years. Last September the US Court of Appeals for the Second Circuit [official website] ruled that a lower court judge should not have expanded a class action suit [JURIST report] of bondholders suing Argentina. District Judge Thomas Griesa had been overseeing litigation related to Argentina's sovereign debt default for roughly 14 years ago. The appeals court noted it was the fourth time it had reviewed and subsequently rejected Griesa's method for calculating damages. In April the Second Circuit dismissed [JURIST report] the Argentine government's appeal of a contempt charge in an ongoing dispute over Argentina's bond default. In September 2014 Argentina signed into law [JURIST report] a bill to continue making payments on foreign-held bonds outside of US jurisdiction, circumventing the US court ruling [JURIST report] that prohibits Argentina from paying its bondholders until the dispute is resolved. In August 2014 Argentina initiated legal proceedings [JURIST report] against the US in the International Court of Justice [official website] over US interference in the restructuring of Argentina's foreign debt.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.