Diaz Reus Partner Marta Colomar-Garcia, acting as Plaintiffs’ co-lead counsel overseeing eight separate class action lawsuits in Argentina’s 2001 $100 billion default, says that Plaintiffs have not been able to engage in genuine and substantive settlement discussions with Argentina in an attempt to resolve the litigation. Earlier in 2016, Colomar-Garcia said that she found out “largely through the press” that the country was currently engaging in substantive negotiations with certain other holdout bondholders.
In a letter to U.S. District Judge Thomas Griesa, who is presiding over the Argentine debt restructuring in the U.S. District Court, Southern District of New York (Manhattan), counsel for the class explained that lifting the injunction banning Argentina from paying some creditors without paying the holdouts would mean accepting and condoning the unequal treatment that the Court once prohibited.
In a preliminary agreement in principle, reached late February 2016 between Argentina and certain hedge funds that had held out for nearly a decade and a half, Argentina would agree to potentially pay nearly 75% of what the hedge funds say the country is obliged to pay, which is reportedly several times more than they actually invested in the debt. But for the proposed deal to become effective, the settlement will need to be approved by Argentina’s Congress and Judge Griesa would need to lift certain injunctions. Plaintiffs’ counsel has urged the court to keep the injunctions in place, saying it’s the only mechanism that has brought Argentina to the negotiating table.
See also background: “$6.5B Argentina Deal Attacked By Class Action Counsel” published by Law360, New York (February 9, 2016, 4:41 PM ET). (Subscription required.)
Seijas v. Republic of Argentina, U.S. District Court, Southern District of New York (Manhattan), is a major class action case involving holders of approximately $700 million of defaulted Argentine bonds. Argentina has conceded liability and the case seeks final quantification judgments, as there is a dispute over seized assets and U.S. Foreign Sovereign Immunities Act limitations. Diaz Reus represents the combined active class of bondholders, “the holdouts,” as co-counsel in the facilitation of asset negotiations.