On Monday, a district judge in New York ruled that Argentina was in contempt of court for its open insubordination of his orders necessitating that US hedge funds holding Argentine bonds be paid roughly $1.5 billion they are owed if the majority of the South American nation's bondholders were paid for bond interests.
US District Judge Thomas P. Griesa made the declaration after a barrister for US hedge funds headed by billionaire hedge fund investor Paul Singer's NML Capital Ltd. contended that Argentina openly disobeyed the judge court orders for over a year. The magistrate earmarked verdict on sanctions pending further proceedings.
The judge said that it was about suggestions, vicissitudes and actions that come from the executive branch of the Republic of Argentina. He added that recurrent efforts to evade recompensing US hedge funds holders after their bonds were not transacted for lesser-valued bonds in 2005 and 2010 was an illicit demeanor that could no longer be disregarded. It was unlike over 90 percent of outstanding Argentine bonds.
The US district judge expressed by saying, "The republic in various ways has sought to avoid, to not attend to, almost to ignore this basic part of its financial obligations." He also disclosed that Argentina had lately taken steps to remove a New York bank as custodian for bonds held by several of its bondholders and transfer the fiscal obligations to a new fund manager based in Argentina.
As per the USA Today report, a New York-based attorney representing Argentina, Carmine Boccuzzi had disputed that a civil contempt finding was untimely. The lawyer said that just as the magistrate had planned, Argentine bondholders who accepted swaps for lesser-valued bonds after the nation evaded on $100 billion of dues in 2001 had not been paid interest. He added that US hedge funds holders sought to penalize Argentina inappropriately. He also insisted that the South American republic had acted responsibly.
Moreover, Attorney Boccuzzi said that compensating the US hedge fund holders would necessitate Argentina to pay about $20 billion to other bondholders who were not part of the lawsuit. On the other hand, he declined to further comment upon leaving the courtroom.
A US hedge fund holders' legal representative, Robert Cohen, admonished the judge to make the contempt finding and foist a $50,000 per diem Argentine fine. He said punishments should be firm enough that Argentina realizes it needed to change its conduct.
Prior to the hearing, Argentine barristers forwarded to the magistrate a letter sent to US Secretary of State John Kerry saying the contempt-of-court finding request was totally irrational. Argentina said that by global criterions, the order would be illegitimate.
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