Supreme Court rejects Argentina bond appeals

[JURIST] The US Supreme Court [official website] on Monday denied appeals from Argentina over debts stemming from an economic collapse over a decade ago. The US Court of Appeals for the Second Circuit ruled in October 2012 [JURIST report] that Argentina must pay $1.33 billion to bondholders when it repays its debts. The Second Circuit affirmed a district court ruling that Argentina breached a promise when it prioritized paying holders of its restructured debt over the bondholders who held its defaulted debt. The Second Circuit also ruled in August that Argentina breached its promise of equal treatment of bondholders. Argentina appealed to the Supreme Court, but the court refused to hear its appeals Monday, denying certiorari [order list, PDF] in two cases: Republic of Argentina v. NML Capital, Ltd. [docket; cert. petition, PDF] and Exchange Bondholder Group v. NML Capital, Ltd. [docket; cert. petition, PDF].

Also Monday the court ruled [opinion, PDF] 7-1 in a related case, also named Republic of Argentina v. NML Capital, Ltd. [SCOTUSblog backgrounder; JURIST report], that a hedge fund can subpoena banks for information about Argentina's non-US assets. The subpoenas were served in 2010 on Bank of America [corporate website] and Banco de la Nacion Argentina [corporate website, in Spanish], and sought documents relating to accounts or assets that Argentina might have at the banks. In an opinion by Justice Antonin Scalia, the court held that no provision in the Foreign Sovereign Immunities Act (FSIA) [PDF] immunizes a foreign-sovereign judgment debtor from postjudgment discovery of information concerning its extraterritorial assets. Justice Ruth Bader Ginsburg filed a dissenting opinion. Justice Sonia Sotomayor took no part in the consideration of any of the Argentina bond cases.

 

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