Federal Judge Loretta Preska has issued a court ruling ordering the confiscation of USD 210 million in assets of the Republic of Argentina. This measure includes the preventive freezing of another USD 100 million that is in dispute among different groups of creditors. The court ruling is the result of a previous decision by the U.S. Supreme Court that allowed the seizure of Argentine assets claimed by holders of unpaid debt since the 2001 crisis.
The affected financial resources correspond to collateral guarantees linked to Brady Bonds, which were used by Argentina to restructure its debt in the 1990s. In case of default on interest payments, creditors had access to the securities deposited in a special account at the Federal Reserve Bank of New York.
Investors such as Attestor Master Value, Trinity Investments, White Hawthorne, Bison Bee LLC, and Bybrook Capital Master acquired Argentine defaulted debt securities from holders who did not participate in the restructurings offered by the country in 2005, 2010, and 2016. These "holdouts" represent less than 3% of the original creditors.
Judge Preska determined that Attestor Master and Bainbridge Fund must resolve in her court the rights over the USD 100 million that has been frozen. This decision adds to other ongoing litigation regarding Argentine debt in international courts, including a recent enforcement for USD 325 million related to the PBI Coupons in London.
Consultant Sebastián Maril, specialized in international litigation against Argentina, explained that Attestor Master claims USD 460 million, while Bainbridge seeks to recover USD 100 million. Argentina has exhausted all appeals and the disputed assets are under the custody of the U.S. Department of the Treasury, as part of the guarantees of the Brady Plan.
The court ruling is another chapter in the protracted saga of litigation over Argentine debt and comes at a delicate time, following the enforcement of assets related to the PBI Coupons in London. The dispute over the Brady Bonds and ongoing seizures continue to be prominent issues in the international financial arena.
