August 12, 2014 / 11:29 PM / 4 years ago

Exclusive: Argentine debt mediator expects more meetings ahead

NEW YORK (Reuters) - Daniel Pollack, the court-appointed mediator in the debt dispute between Argentina and holdout creditors, who has come under fire from the Argentine government for his handling of the talks, expects to hold more meetings with both sides.

U.S.-court appointed mediator Daniel Pollack arrives at federal court for a hearing on Argentina's debt crisis, in New York August 1, 2014. REUTERS/Carlo Allegri

U.S. District Judge Thomas Griesa appointed Pollack, an experienced New York lawyer, as Special Master in the long-running dispute that dates back to Argentina’s near $100 billion sovereign debt default in early 2002.

The two sides have not met since Argentina defaulted for the second time in 12 years on July 30.

“I have been in touch with the attorneys for the parties. I am anticipating meetings of the parties and their attorneys as we go forward,” Pollack told Reuters. He declined to elaborate further.

Holdout creditors led by deep-pocketed hedge funds Elliott Management Corp and Aurelius Capital Management, won an award of $1.33 billion plus accrued interest in 2012.

Earlier on Tuesday Thomson Reuters IFR reported that plans being formulated by international banks to try to facilitate a buyout of the holdouts positions was struggling to come to fruition.

Elliott, with $24.8 billion in assets under management (AUM), and Aurelius, with $4.5 billion in AUM, specialize in buying up distressed or defaulted debt and negotiating profitable settlements, sometimes through the courts.

Their case was upheld on appeal and denied hearing by the U.S. Supreme Court in June, just before a regularly scheduled coupon payment was due on restructured bonds.

Argentina defaulted July 30 on those bonds after the two sides could not come to an settlement, having only been brought face-to-face for the first time in 13 years just one day ahead of the deadline.

Buenos Aires lashed out at Pollack the day after the default calling him incompetent. Griesa jumped to Pollack’s defense on Aug. 1, confirming his position and maintained an order for both sides to continue to meet in hopes of reaching a settlement.

In 2012 Griesa ordered that Argentina could not pay creditors who decided to settle with the government in 2005 and 2010 without also paying the holdouts concurrently, basing his decision on an equal treatment clause known as pari passu that was contained in the original debt issued in 1994.

Griesa held a second post-default hearing with attorneys for both sides, this time prompted by published legal notices by Argentina asserting it was not in default because it deposited its coupon payment with the trustee Bank of New York Mellon. That $539 million deposit is now frozen per Griesa’s 2012 ruling.

Griesa said Argentina it was publishing misleading statements and then threatened a contempt-of-court order if it did not stop. Argentina’s lawyers from Cleary Gottlieb Steen & Hamilton said they had nothing to do with the legal notices.

Reporting By Daniel Bases; editing by Andrew Hay

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