As Argentina celebrates closing the largest debt exchange offer
in history this month, a cloud of creditor lawsuits lurks on its
horizon. But it is a cloud that is likely to herald a less dramatic
storm than many had predicted.
In January Argentina, owing more than $100 billion to hundreds
of thousands of investors around the world, offered to pay its
creditors roughly 30 cents for each dollar due to them. Seventy-six
percent of the bondholders agreed to Argentina's terms, resigning
themselves to the fact that the government either could not or
would not pay more. But the remaining creditors, representing
almost $25 billion in outstanding debt, have been left with a
choice: cave in to the offer, or try to force Argentina to pay
more.
With Argentina apparently unwilling to negotiate, the most
obvious route open for these creditors to reach their money has
been through the courts. $25 billion is...