Private Law Theory

“In 2001, Argentina defaulted on about $92 billion worth of bonds. It subsequently restructured these bonds, and 93% of bondholders accepted the 30 cents on the dollar that Argentina offered. But some hedge funds bought the original bonds at a discount and held out on repayment. They were able to persuade Judge Griesa in New York that a pari passu clause in the original bonds prohibited Argentina from treating new bonds differently than the original bonds, and the judge actually issued an injunction prohibiting Argentina from making payments on the new bonds – effectively locking Argentina out from capital markets …” (more)

[Aditi Bagchi, New Private Law, 29 February]

First posted 2016-03-01 07:18:11