Saturday, June 28, 2014
American judge pushes country into bankruptcy posted by Richard Seymour
A US judge has blocked a $500m (£290m) payment by Argentina to creditors due on Monday, pushing South America's second largest economy closer to a second massive default in 13 years.New York district judge Thomas Griesa said after a quickly convened court hearing that Argentina was in breach of his decision that US vulture funds, which have pressed for full repayment of their loans, were entitled to bypass a longstanding debt restructuring deal.The ruling, which enforces an earlier decision in favour of vulture funds seeking a $1.6bn payout, means that $539m of Argentina's scheduled debt repayments were stuck in Bank of New York Mellon, which as trustee was due to disburse the payments under the previous debt deal.A spokesman for the vulture funds called Argentina's attempt to pay rival creditors holding restructured bonds a "brazen step" that had forced them back to court. Robert Cohen, a lawyer for NML Capital, the lead hedge fund pursuing Argentina, had asked Griesa to hold the country in contempt of court.Argentina has claimed it will default if the US courts insist the vulture fund bondholders – many of which bought their bonds at a steep discount – are repaid in full.