Appeals court rebuffs NY judge in Argentine debt dispute
A United States appeals court has ruled that a New York judge went too far in a recent decision favouring a second group of holdout investors in a long-standing debt dispute with Argentina.
The 2nd US Circuit Court of Appeals said Monday that US District Judge Thomas Griesa should not have ruled in June that Argentina needed to pay US$5.4 billion to the so-called me-too debt holders before paying its majority creditors.
The court ordered Griesa to limit his scope to the group of hedge funds that initially sued Argentina after refusing to accept bond swaps.
The dispute has its roots in Argentina's US$100-billion default in 2001. Griesa has repeatedly ruled that Argentina can't make payments on its debt without paying US$1.3 billion to the holdout funds.