Argentina asks U.S. court for rehearing in fight with bondholders

Fri Sep 6, 2013 11:34pm EDT
 
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By Nate Raymond

NEW YORK (Reuters) - Argentina urged a U.S. appeals court Friday to reconsider an order last month requiring it to pay $1.33 billion in favor of hedge funds that have refused to participate in two debt restructurings that sprang from Argentina's 2002 default.

In a court filing, Argentina asked the 2nd U.S. Circuit Court of Appeals in New York for a rehearing either by the three-judge panel that issued the August 23 decision or by a larger group of 14 judges on the court.

"The decision makes grave legal errors that magnify the error of the panel's previous unprecedented holdings," Argentina's lawyers wrote.

The petition for a so-called en banc hearing sets the stage for a final attempt by Argentina to reverse a ruling that has created concerns of a potential new debt crisis in South America's third-largest economy.

The case, which could ultimately find itself at the U.S. Supreme Court, stems from Argentina's $100 billion default on its sovereign debt in 2002.

In two restructurings in 2005 and 2010, creditors holding around 93 percent of Argentina's debt agreed to participate in debt swaps that gave them 25 cents to 29 cents on the dollar.

But bondholders led by the hedge funds NML Capital Ltd, which is a unit of Paul Singer's Elliott Management Corp, and Aurelius Capital Management went to court, seeking payment in full.

The case was filed in New York under the terms of the language in the bond documents.   Continued...