UPDATE 1-Argentina's fight with bondholders reaches U.S. top court

jueves 17 de abril de 2014 16:02 GYT

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By Lawrence Hurley

WASHINGTON, April 17 (Reuters) - The U.S. Supreme Court on Monday wades into Argentina's multi-billion dollar legal fight with bond investors who turned down two debt restructuring offers after the country's 2002 default.

The relatively narrow case that the nine justices are due to hear concerns whether the investors can force banks in New York with which Argentina does business to disclose information about the country's non-U.S. assets as the investors seek repayment.

The case is in some ways the appetizer, with the main course in the no-holds-barred litigation yet to come. A bigger case, in which Argentina is challenging a court judgment ordering it to pay $1.33 billion to the so-called "holdout" bond investors or face a potential default if it refuses to do so, waits in the wings.

The high court could decide in June whether to take up the bigger case. It would not be argued or decided until the court's next term beginning in October and ending in June 2015.

Argentina has been battling for a decade with the bondholders led by hedge funds NML Capital Ltd, a unit of billionaire Paul Singer's Elliott Management Corp, and Aurelius Capital Management. Argentina argues the funds bought most of the debt at a deep discount after the default and sought to thwart the country's efforts to restructure. Creditors holding about 93 percent of Argentina's bonds agreed to participate in two debt swaps in 2005 and 2010, accepting between 25 and 29 cents on the dollar.

Although the two cases present different legal questions, both broadly concern the scope of sovereign immunity, which is the legal principle that sets limits on when nation states can be sued. The bond investors have embraced a litigation strategy that aims to circumvent those limits.   Continuación...