Post date : 02.13.2015 2:25 pm
Today a UK court ruled that it would not interfere with U.S. court proceedings related to Argentina’s obligations under the pari passu injunction.
After failing to get a U.S. court to release funds that Argentina illegally sent to BNY (as trustee) in June, a group of Argentina’s exchange bond holders sued BNY in a UK court seeking essentially the same relief. The court refused to give the bond holders a second bite at the apple.
The UK Judge reaffirmed the propriety of the U.S. court’s injunction freezing the funds because BNY, as trustee “can properly be the subject of any orders which that court considers appropriate”. The court also expressed its reluctance to get involved in the pari passu proceedings in the U.S.: “The Court is, of course, very concerned not to intrude improperly into matters which are before U.S. Courts.”
This was a setback for Argentina. The only item granted was a declaration — which was not even disputed by BNY — that, under English law and per the bond documents, the funds sit in trust. But no relief was granted.
It’s remarkable that Argentina remains unwilling to sit down and negotiate with its creditors, given that these creditors have stated repeatedly that they are seeking a final settlement to end the dispute.
Argentina is running out of time and excuses: RUFO has expired, Argentine businesses remain unable to attract adequate credit, oppressive currency controls depress trade, and the Argentine economy is being squeezed. Negotiating a final settlement is the answer.