U.S. supports Argentina in appeal over debt injunctions

Thu Mar 24, 2016 11:21am EDT
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By Nate Raymond

NEW YORK (Reuters) - The U.S. government is asking a federal appeals court to uphold the lifting of injunctions that have restricted Argentina from paying off some of its debts given the country's efforts to settle litigation over bonds in default since 2002.

The U.S. government has "significant foreign policy interests in supporting a swift resolution to this long-running litigation," the U.S. Justice Department said in a brief filed on Wednesday with the 2nd U.S. Circuit Court of Appeals in New York.

The Justice Department asked the court to uphold a March 2 ruling by U.S. District Judge Thomas Griesa in Manhattan that approved lifting injunctions he had issued in the case after Argentina made a $6.5 billion offer to settle the litigation.

The Justice Department argued vacating the injunctions would back the U.S. government's interests in supporting Argentine President Mauricio Macri's efforts to reverse prior economic policies and strengthen the country's economy.

Representatives for creditors in the case including Elliott Management's NML Capital Ltd either declined comment or had no immediate comment.

The brief was filed amid a visit to Argentina by U.S. President Barack Obama, who on Wednesday praised the pace of reforms taken by Macri, the country's new center-right leader, to strengthen the economy.

It came despite requests to the Justice Department in recent days by some bondholders who had not reached settlements with Argentina that it not back the country.

Griesa's ruling vacating the injunctions was conditioned on Argentina repealing two laws concerning its debts and paying creditors who by Feb. 29 reached settlements with the country.   Continued...

A pedestrians walks past a closed store in Buenos Aires, September 5, 2014.      REUTERS/Enrique Marcarian