The Government paid a creditor in New York that had been in default since 2001



Judge Loretta Preska
Judge Loretta Preska

The government agreed to pay $1.93 million to a bondholder in a 2001 debt-default case that had sued in the United States.

In this way, the creditor withdrew from the lawsuit in the last hours, according to the decision known through the debt analyst Sebastian Maril.

In the brief of the Federal District of New York it was indicated that “considering that on December 19, 2006, the plaintiffand Roberto Fiore, among others, filed an Amended Claim against the Argentine Republic (the “Republic”) based on its ownership of effective interests in bonds issued by the Republic (the “Bonds”); cConsidering that the plaintiff has resolved his claims and, consequently, no longer has any interest in the Bonds that are the subject of the aforementioned case”.

“Now therefore, Plaintiff, for its attorneys Melchionna, PLLC, and the Republic, for its attorneys Cleary Gottlieb Steen & Hamilton LLP, stipulate and agree that Plaintiff’s claims are dismissed. pursuant to the Federal Rule of Civil Procedure; Civil Procedure 41(a)(1)(A)(ii) with prejudice and without costs”, indicated the judicial decision.

The plaintiff, for its attorneys Melchionna, PLLC, and the Republic, for its attorneys Cleary Gottlieb Steen & Hamilton LLP, stipulate and agree that plaintiff’s claims are dismissed

The case began in 2006, when a group of creditors of Argentine debt in default that did not enter the 2005 swap to get out of default denounced Argentina in a court in New York, nor did they accept the resolution implemented in 2010. 2016 by the government of Mauricio Macri to get out of the cessation of payments.

The text of the Government's agreement with a bondholder in New York in court
The text of the Government’s agreement with a bondholder in New York in court

The judge Loretta Preskain a document dated this Monday, stated that flower reached an agreement with Argentina and no longer has “any interest in the bonds”, for which he ordered his complaint dismissed.

According to the analyst sebastian maril a Infobae “This case is one of the five that had resorted to embargoes to collect. Beltramo was looking for state assets at the Banco Nación branch in New York. Finally the government paid. The other cases are Aerolineas Argentinas, Bainbridge Capital (holdout), Attestor Master Value (holdout) and WeBuild (the former Impreglio)”.

Order to the National Bank

Maril also indicated that the creditor had requested to collect “through an asset seizure process that the State has in the Bank (of the) Nation” in New York.

At the end of June, Preska ordered Banco Nación in New York to deliver information to seize assets and pay this bondholder, who was in default and had a favorable judgment.

Maril reported that Judge Preska, who inherited the cases carried out by Judge Thomas Griesa, in June ordered the Banco Nación branch in Manhattan to provide “documents, emails, account information or any object, to initiate an inspection (Discovery) for the purpose of seizing assets and to pay a judgment to a creditor with bonds in default”, in the case entitled “Renzo Beltramo versus the Argentine Republic”.

According to the documents delivered by Argentina’s defense to the court, the Government paid the sentence to this complainant, who had bonds denominated in euros, in early August. According to international agencies, in 2016, Argentina already reached agreements worth 6.7 million dollars with a dozen of the bondholders in the case, directed by Judge Thomas Griesa and which in 2017 was inherited by Judge Preska.

Judge Thomas Griesa had issued the first rulings against Argentina after the 2001 default (EFE)
Judge Thomas Griesa had issued the first rulings against Argentina after the 2001 default (EFE)

In the 2005 and 2010 swaps, the Argentine government managed to add to 93% of the creditors that fell into default after the Argentine government’s declaration of default at the end of 2001. In 2011, 10 years after that Argentine decision, the judge Thomas Griesa began to dictate sentences when the Argentine government closed the door to the rest of the bondholders -The so-called “vulture funds” and institutional and individual investors who did want to negotiate – with a “lock clause”.

In 2014, the Supreme Court of the United States upheld rulings against the country because President Cristina Kirchner and Minister Axel Kicillof They decided to cancel at the last minute an agreement reached by the Central Bank and a group of national and foreign banks to solve the problem.

In 2016, the government of Mauricio Macri resumed negotiations with the funds that had favorable rulings and agreed through the minister’s team Alfonso Prat Gay a negotiated exit with a haircut close to 30% –approved by Congress– and a significant cut in interest accrued since the end of 2001.

In 2020, the government of Alberto Fernandez made through the minister Martin Guzman another debt restructuring with private creditors, which achieved a broad adherence of 99% of the participantsalthough, as it did not generate immediate payments and was not carried out in a climate of recovery of investor confidence, it did not translate into an improvement in the local financial situation in the markets, as reflected in the weak prices of bonds. Argentineans, both under national and foreign law, with a country risk that closed on Friday at 2458 basis points.

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