July 28, 2014
Interview with richard samp of the washington legal foundationSaturday, June 28, 2014
‘Argentina seeks to show the world it wants to pay’
In an interview with the Herald, lawyer and chief counsel of the Washington Legal Foundation Richard Samp said he is hopeful a deal can be reached between both parties before July 30, when the country’s grace period to service debt due on June 30 ends. He also said it is clear Griesa is “angry” with Argentina and could hold the country in contempt if it tries to pay restructured bondholders.
What are the main conclusions from today’s meeting with Judge Griesa?
It sounds like he is very angry with Argentina. The country is looking for ways to avoid his injunction and that doesn’t make him happy. He banned banks from paying bondholders but I’m sure no bank would risk making a payment since that would increase his rage. The judge is losing his patience.
Could the country be considered in contempt of court?
Argentina is trying to avoid the order but Griesa wouldn’t necessary hold it in contempt of court until payments to bondholders are made. If Griesa decides that, he would issue a fine to Argentina that would be discussed in a new hearing. He can’t force the country to pay the fine but being in contempt of court wouldn’t make Argentina look very good to the rest of the world.
Why did the government send the funds even though Griesa could have seized them?
Argentina wants the world to see that it’s doing everything in its power to pay its debts and that the country is being prohibited from doing that by Griesa.
Are you hopeful Argentina can achieve a solution through a negotiation?
I hope that after yesterday’s meeting a negotiation would be boosted by Argentina and the hedge funds. Nobody can win the case by fighting. I hope a settlement can be reached to solve this situation. But if Argentina does sign an agreement it could look as a defeat for President Cristina Fernández de Kirchner, who repetedly said she wouldn’t negotiate.
Will the country enter into a new default?
No, there can’t be a default until the 30-day grace period ends on July 30.
Could Griesa’s order to negotiate help Argentina argue that it was not voluntary and avoid claims under the infamous Rights Upon Future Offers (RUFO) clause, which forbids the country from voluntarily offering better terms than it gave the restructured bondholders?
Yes, indeed. The more that Argentina can demonstrate that any payments would be carried out due to a court order, the better argument it has to argue that RUFO should not apply.