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June 17, 2014

Supreme Court Rules in Favor of "Vulture Funds" in Argentina Debt Case 
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The U.S. Supreme Court has rejected an appeal from Argentina over its
$1.5 billion debt in a ruling critics say validates predatory behavior
by so-called "vulture funds." The case involves hedge funds that bought
up Argentina's debt at bargain rates after its financial crisis more
than a decade ago. After Argentina defaulted on its debts, the vast
majority of its creditors agreed to slash the value of their holdings.
But NML Capital and other firms refused to accept the deal, instead
seeking full repayment. Monday's ruling leaves in place a lower court
decision ordering Argentina to pay the companies. Argentine President
Cristina Fernández de Kirchner addressed the nation after the ruling.

President Cristina Fernández de Kirchner: "I think that you need to
distinguish between what is a business and what is an extortion. I think
there are two concepts that are completely different. All the
government, all the country, all the directors, in the areas of the
environment and policies, need to be open to negotiating. What no
president can do in a sovereign country is to subject its country, its
people to extortion."

In a statement, the anti-poverty network Jubilee USA called the court
ruling "a devastating blow," saying, "These hedge funds are equipped
with an instrument that forces struggling economies into submission."

 

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