Judge: Lawyers can seek facts about Argentina bond offering
Apr. 22, 2015
NEW YORK (AP) — Lawyers for U.S. bondholders who are owed money by Argentina can seek information from banks and the republic about a new bond offering it has arranged, a judge said Wednesday.
U.S. District Judge Thomas Griesa told lawyers for billionaire hedge fund investor Paul Singer's NML Capital Ltd. that they are entitled to basic facts about the over billion-dollar offering. He said the information will allow them to see if there is any money they can try to obtain to satisfy judgments totaling about $1.5 billion. He called their effort a "legitimate quest."
The judge said he would prefer that Argentina negotiate through a court-appointed special master with the U.S. bondholders to settle their claims but he understands the only other avenue is to try to siphon away money connected to Argentina that is passing through U.S. financial institutions.
Argentina's leaders call the U.S. funds "vultures" because they refused to participate in swaps in 2005 and 2010 in which more than 90 percent of Argentina's bondholders agreed to accept lesser-valued bonds.
Attorney Jonathan Blackman, representing Argentina, told the judge that the offering was a "purely internal domestic Argentine debt offering of a kind Argentina has done repeatedly over many years."
He said the money would be used to fund infrastructure and social issues in Argentina. The republic conducted a similar offering a year ago, he added.
He called the request by NML Capital "ridiculous," saying the bondholders were seeking information in the hopes they could seize assets they were not entitled to.
Attorney Robert A. Cohen, representing NML Capital, said he wants to see how the bond deal is structured to ensure it is not a ruse to evade the judge's orders.
The judge has required Argentina to pay the U.S. creditors if they pay bondholders who accepted lesser-valued bonds in the debt swaps.
Cohen said Deutsche Bank AG in New York is buying the bonds from Argentina and was making calls to create a market to resell them. He said he knew that was true because some of the plaintiffs had received calls from Deutsche Bank about the bonds.
He asked for quick action by the judge because the bond deal was slated to close on Thursday.
The judge directed lawyers on all sides to immediately discuss what information can be turned over and to contact him if there are problems.
"The plaintiffs are entitled to discovery to determine if the new financing will produce assets which are available to satisfy in whole or in part the plaintiffs' longstanding unsatisfied debt," he said. "Mr. Cohen has a legitimate need for very prompt information."
A lawyer for Deutsche Bank told the judge it would cooperate but said NML had not specified what information it was seeking.