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November 1, 2014
Monday, August 25, 2014

Investor Soros sues BONY for unpaid Argentina bonds

Billionaire United States investor George Soros and Kyle Bass, the founder of hedge fund Hayman Capital Management, have opened a lawsuit against the Bank of New York Mellon (BONY) for failing to distribute 226 million euros in Argentine bonds to creditors.

According to a report from Bloomberg, the litigation was initiated due to the BONY's refusal to pass on to bondholders a payment made by Argentina on June 26, which was blocked by a ruling from New York judge Thomas Griesa as part of the dispute with holdout investors.

“They failed to transfer the euro funds in accordance with their trust obligations,” Bass said in an interview today.

“Our interest payment is governed by UK law, which hasn’t ruled on this. Until there’s a similar injunction in the UK, they owe us our interest payments.”

The bank, named as the official agent for the distribution of Argentine debt payments in New York, also face legal action from Brazil.

Administrators of a postal workers' pension fund from that country have frozen a BONY account worth 87 million dollars, as part of a legal action which demands compensation for the losses suffered by the fund's holdings. The administrators allege that those losses were caused by the bank's handling of the dispute.

On August 5, the Brazil Sovereign II account lost 51 percent of its value, according to a report to regulatory authorities cited by the Folha newspaper.

Administrator Postalis claims that the bank supplied the fund with credit-linked securities bonds, titles which allow greater profits than conventional bonds but with greater losses in the case of a default.

Due to the non-payment of Argentine interest services, the fund's assets dropped from 197.9 to 185.5 million Reales.
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Tags:  Soros  Hayman  BONY  lawsuit  Argentina  Griesa  





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