Post date : 03.23.2015 2:46 pm
On Friday, the pari passu co-plaintiffs and Citibank signed an agreement that was later approved by Judge Griesa.
Some news reports coming out of Argentina contain incorrect information about Friday’s agreement. Some of these inaccuracies may be just confusion. Others appear to be the result of misinformation by the Argentine government. Here are the facts about the deal:
– The deal was reached as the result of negotiations between the pari passu plaintiffs and Citibank. Once the parties reached an agreement, they submitted the agreement to Judge Griesa, who approved it.
– Judge Griesa’s approval of the agreement was in no way inconsistent with his denial of Citibank’s previous request for a stay, in which Citibank had asked for time to appeal the court’s March 12, 2015 Argentine law Exchange Bond ruling. As part of Friday’s agreement, Citibank agreed not to appeal the March 12 ruling and will not make any further stay requests of the court.
– The co-plaintiffs agreed to give Citibank an opportunity to exit its custody business in Argentina and agreed to allow Citibank – and Citibank only – to process an Argentine law Exchange Bond if Argentina chooses to violate the pari passu injunction on March 31.
– The agreement does NOT stay the pari passu injunction. Argentina is not permitted to make a payment on the Argentine law Exchange Bonds on March 31 unless it pays or settles with the co-plaintiffs.
– If Argentina makes an illegal payment on March 31, parties other than Citibank that participate in processing the payment will also be in violation of the pari passu injunction.
Here’s a copy of the agreement, signed by Citi and the plaintiffs.
Citibank was in a unique position, having been threatened by the Argentine government for signaling that it would not be a party to Argnetina’s lawlessness. The agreement provides Citibank with a shield against Argentina’s threats while maintaining the integrity of the injunction.
Argentina’s creditors have proven that they can negotiate. It is now long-past time for Argentina to do the same by coming to the table to settle this decade-long dispute.