Holdout creditors file stance against Argentina

Scales of justice

flickr-mikecogh

Holdout creditors, who chose not to accept Argentina´s debt restructuring, are due to file their case once more against the South American country in the US Court of Appeals.

Following Argentina's debt default in 2001, certain creditors chose to employ legal means to obtain the full amount of their loans back, as opposed to accepting a debt restructuring that would return only 30 percent of their investment. 

In late 2012, the US Court of Appeals ruled that Argentina had violated the pari passu clause, which stipulates that all bondholders should receive equal treatment. In this case, those creditors who chose to opt out of the debt restructuring were treated unfairly by not receiving any compensation. 

Judge Griesa therefore ruled that Argentina must repay their holdout creditors in full, an amount of $1.3 billion. However, this decision was overruled by the Court of Appeals, perhaps due to a concern that this repayment would lead to another Argentina default. 

Following the overturn of Judge Griesa's decision, Argentina requested a rehearing of the case, which is due to take place on February 27. In filing their arguments once more for the courts, the South American country said it was willing to reopen the possibility of another debt restructuring, allowing holdout creditors another chance to accept the same terms offered in the debt restructurings of 2005 and 2010. 

Creditors may address the possibility of another restructuring in the filing of their stance, scheduled for this occasion.