Argentina finally began its record-breaking debt exchange
last month after a US appeal court ruling released several
billion dollars in defaulted bonds. In doing so, the court
enabled the largest restructuring in history to go ahead after
weeks of delay, and arguably signed a death warrant for
pre-exchange lawsuits by holdout creditors.
At the start of the year Argentina offered creditors on its
more than $100 billion in debt approximately 30 cents for each
dollar they were owed. Seventy-six percent of them agreed to
the exchange, believing it was the best offer they were likely
to receive. But creditors representing almost $25 billion in
debt rejected the deal. Among these holdout creditors were
several who opted to take Argentina to court in the hope of
securing a higher return than the exchange offer.
Since Argentina defaulted on its debts in 2001 a series of
creditors have taken the government...