Q&A: Argentina's NY court showdown on default debt
BUENOS AIRES, Argentina (AP) -- Judgment day is approaching in an epic battle between Argentina and New York billionaire Paul Singer, who has sent lawyers around the globe trying to force the South American country to pay its defaulted debts.
Three U.S. appellate judges hear oral arguments in New York on Wednesday in the case, NML Capital Ltd. v. Argentina. The case has shaken bond markets, worried bankers, lawyers and diplomats, captivated financial analysts and generated enough "friend of the court" briefs to kill a small forest.
Much more is at stake than the future of Argentina's shaky economy, which could collapse if President Cristina Fernandez goes into default rather than pay a judgment of more than $1.3 billion to the plaintiffs, whom she calls "vulture funds."
The U.S. Federal Reserve and the world's largest banks have warned that the smooth functioning of the global funds-transfer system is threatened by U.S. District Judge Thomas Griesa's unusual proposal for forcing Argentina to pay. The same appellate judges hearing arguments Wednesday have already broadly upheld Griesa's plan but want more details on how it would work.
It will be an interesting test, if things go as predicted here and Argentina loses, and then: "Q. Would Argentina really pull out of the U.S. financial system?" whatever that means happens. What follows that will indicate just how much the "indispensible country" we remain.