It is expected that before the end of the month, the Court of Appeals will resolve the amount and the formula of payment on the debt in default and, above all, if Argentina’s funds are attachable that it deposits in Bank of New York to pay the bondholders that did enter the exchange.

Clarin

Vultures: It is said that Obama might intervene in favor of Argentina

 

Sunday, July 14, 2013

 

By Ana Baron

 

Washington Correspondent – The United States is studying the possibility of intervening before the Supreme Court in the case of Argentina against the vulture funds.  An article published on Friday in the Washington Post reveals that officials from the Justice Department met with attorneys from both sides on Thursday and its authors speculation that the intervention would be in favor of Argentina.

 

Clarín could confirm that Treasury and State officials also attended the meeting.

 

What is not clear is what the reach will be, or the effect, of a U.S. intervention.  In fact, the support that the country has already given Argentina at the level of the Court of Appeals was totally ignored.

 

“What they are studying now is the possibility that the Solicitor General (representative of the Obama government before the Supreme Court) will send an amicus curiae to the Court saying that what is in play in this case is the importance of sovereign immunity,” said a New York attorney involved in the case, to Clarin.

 

It is expected that before the end of the month, the Court of Appeals will resolve the amount and the formula of payment on the debt in default and, above all, if Argentina’s funds are attachable that it deposits in Bank of New York to pay the bondholders that did enter the exchange.

 

Argentina is betting that the case will reach the Supreme Court and, while it is taken up there, current conditions won’t change.

 

“I believe that the U.S. government will present a request for the Supreme Court to take the case,” said Eugenio Bruno, of the Garrido Firm.  “The Court could take cases not only for questions of federal law (like the Foreign Sovereign Immunities Act) but also over questions of diplomacy and relations with foreign governments,” he added.

 

According to Bruno, “when the American government steps in, the chances that the Supreme Court takes a case rise from 3% to more than 50%.  I believe that the Court will take the case,” he said.

 

The funds are aware of that possibility.  Beyond the legal battle they are waging, at the political level in June a lobby began to develop in Congress and U.S. newspapers.  They accuse Argentina of being a delinquent country that doesn’t honor its obligations and is a good ally of Iran.  According to the Washington Post, last Wednesday the funds got 10 Republican legislators and 2 Democrats to send a letter to Attorney General Eric Holder asking that that U.S not support Argentina.

 

In the two amicus curiae that were already filed in favor of Argentina, the U.S. in fact agreed with the funds by criticizing the government for not honoring its obligations.  It mentioned “the debt with the Paris Club, the unpaid rulings at the ICSID, the problem of the statistics and the IMF.”

 

But beyond the bad fame that Argentina has in Washington, the U.S. made it clear in the amicus curiae that it doesn’t want the fight between the vulture funds and Argentina to set a precedent nor that more countries will not avoid issuing bonds under New York law.

 

According to the IMF, if Argentina loses this case, the funds will acquire a level of influence that would have a negative influence in future negotiations.  In fact, Paul Singer, the owner of NML, the vulture fund that is leading the lawsuit against the country, does not enjoy the sympathy of the Obama government.  He is a large contributor to the Republican Party.