NEW YORK, July 30, 2014 Daniel A. Pollack, the Special Master appointed by JudgeThomas P. Griesa to
conduct and preside over settlement negotiations between the Republic of Argentina
and its Bondholders, issued the following Statement tonight:
“This morning and this afternoon,
representatives of the Republic of Argentina, led by Minister of the Economy,
Axel Kicillof, and representatives of its large bondholders held further
face-to-face meetings in my office and in my presence. Unfortunately, no
agreement was reached and the Republic of Argentina will imminently be in
Default. Today, July 30, was the last day of the grace period for the Republic
of Argentina to pay many hundreds of millions of dollars of interest to
its “exchange” bondholders, i.e. those
who took bonds in 2005 and 2010 in exchange for the bonds they held following
the Default of 2001.
In order to make that payment of interest,
however, the Republic of Argentina was also required, simultaneously, to make a
”ratable” payment to the bondholders who declined to accept the exchanges of
2005 and 2010, i.e. the “holdouts”. The
Republic of Argentina did not meet those conditions and, as a result, will be
in Default. Notwithstanding any claim to the contrary, Default is not a mere
“technical” condition, but rather a real and painful event that will hurt real
people: these include all ordinary Argentine citizens, the exchange bondholders (who will not receive their interest ) and
the holdouts ( who will not receive payment of the judgments they obtained in
Court). The full consequences of Default are not predictable, but they
certainly are not positive.
This case has been highly publicized and
highly politicized for many weeks. What
has been perfectly clear to me all along, however, in my capacity as the
neutral Special Master, is that the laws of the United States must be obeyed by
all parties. The courts of the United States (both the United States District
Court and the United States Court of Appeals), after full briefings and hearings, ruled that the
Republic of Argentina could not lawfully make the interest payments to the
exchange bondholders unless it simultaneously made the payments due the
holdouts. I have worked relentlessly,
over a five-week period, to bring the Republic of Argentina and its bondholders
together in an agreement that would allow the June 30 interest payment of many
hundreds of millions of dollars to be made, and to be made lawfully, thereby
avoiding Default. It is not my role or
intent to find fault with either side.
I will continue to be available to the
parties to aid them in reaching a resolution which they must reach in the
interests of all concerned. Default
cannot be allowed to lapse into a permanent condition or the Republic of
Argentina and the bondholders, both exchange and holdouts, will suffer
increasingly grievous harm, and the ordinary Argentine citizen will be the real
and ultimate victim.”
Daniel A. Pollack
For
further information: Daniel A. Pollack, 212-609-6800
