Sunday, December 30, 2012

Argentina asks U.S. court to block payouts for debt holdouts

NEW YORK (Reuters) - Argentina is urging a U.S. appeals court to reverse an order requiring the country to pay $1.33 billion to creditors who did not participate in its two debt restructurings, a legal case that could have huge ramifications for global debt markets.

Lawyers for Argentina's government said in court papers filed late on Friday that a trial judge was "wrong to ignore the chorus of voices" who opposed his November order on payments to so-called "holdout" creditors.

Those payments, to a court-controlled escrow account, would threaten the service of $24 billion in restructured debt, Argentina's lawyers wrote in papers filed in the 2nd U.S. Circuit Court of Appeals in New York.

"There is no authority permitting a U.S. court to order a sovereign to bring its immune assets into the United States in order to 'turn over' or distribute them to its creditors," lawyers for the Argentine government said in the 69-page filing.

The appeals court is expected to decide next year whether to force Argentina to pay the $1.33 billion to investors in the defaulted debt. The decision could have broad impact on the ability of governments to raise money by selling bonds and on strained countries' response to economic crises.

The case stems from Argentina's $100 billion sovereign debt default 11 years ago. Argentina is trying to avoid paying the holdout creditors, who refused to take part in massive debt restructurings in 2005 and 2010.

About 92 percent of the bonds were restructured, giving holders between 25 cents and 29 cents on the dollar.

But the holdouts, led by Elliot Management Corp affiliate NML Capital Ltd and the Aurelius Capital Management funds, demanded to be paid in full. Argentina calls the holdouts "vultures" and has resisted.

The case has run for years in U.S. courts. Oral arguments before the 2nd Circuit on the appeal are set for February 27, 2013.

A decision against Argentina would deal a setback to President Cristina Fernandez, who is trying to avert the fallout of a potential technical default on tens of billions of dollars of debt.

In a statement late on Friday, an NML spokesman said Argentina was well placed to compensate the holdouts, citing its "more than $43 billion in foreign currency reserves" and billions more in other resources.

"Today's filing by the Republic once again demonstrates Argentina's irrational persistence in evading its contractual obligations and the orders of U.S. courts," said Peter Truell, a spokesman for NML.

Also on Friday, the U.S. government filed a friend-of-the-court brief in support of Argentina's bid for the appeals court to reconsider its October ruling that found Argentina had improperly discriminated against bondholders who did not participate in the debt swaps.

The U.S. government said countries needed leverage to garner broad creditor support for a restructuring. It cited the recent debt exchange in Greece as an example of a situation in which holdouts can threaten orderly bond restructurings.

JUDICIAL REPRIEVE

Following the appeals court's October decision, U.S. District Judge Thomas Griesa in Manhattan on November 21 commanded Argentina to put the payments for the holdouts into escrow by December 15.

But on November 28, the 2nd Circuit gave Argentina a reprieve, saying it did not need to make the escrow payment for now.

The battle has even extended to the 2-1/2 month seizure of the Argentine naval vessel ARA Libertad in Ghana at the request of NML. The boat was freed on December 19 following a ruling by an international admiralty tribunal.

In its court papers, Argentina said that if Griesa's orders were allowed to stand, "we may very well see the end of such restructurings and enter an era where debt crises are unresolvable. This will increase litigation, not reduce it."

At the same time, the country's lawyers said Argentina understood the appeals court's desire to resolve the litigation, and "is prepared to do what it can to end it."

Argentina's lawyers said Fernandez was "prepared once again" to ask Argentina's Congress to end the litigation by treating the holdout bondholders the same as those who participated in the 2010 debt swap.

In a separate court filing, lawyers for holders of restructured bonds said that holdouts should not be treated better than "innocent" bondholders who took part in the swaps. The restructured bondholders include funds managed by Gramercy Financial Group LLC and BlackRock Inc , according to the court papers from the group.

The case is NML Capital Ltd et al v. Argentina, 2nd U.S. Circuit Court of Appeals, No. 12-105.

(Reporting by Jonathan Stempel, Nate Raymond and Martha Graybow in New York; Editing by Ron Popeski)

Source: http://news.yahoo.com/argentina-asks-u-court-block-payouts-debt-holdouts-054447388--finance.html

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Climate Change Is Not Just an Environmental Problem -- It's ... - Care2


Kit B. (304)
Friday December 28, 2012, 9:39 am
(Photo Credit: Jean Lee/ Shutterstock.com)

This article was published in partnership with GlobalPossibilities.org.

The Delaware River Basin Commission (DRBC), the agency in charge of the Delaware River as it winds through four states, conveniently sidestepped taking responsibility for overseeing the cumulative effects of the many natural gas pipelines being built around or through the Delaware River watershed by saying, essentially, "that's not our job." It's a tried-and-true political maneuver. But, if it's not the job of the DRBC, then we are really screwed here in the Delaware River Valley. That means it's not anybody's job to look after the aggregate environmental degradation in the watershed and threats to human (and animal) well-being caused by the standard procedures of the natural gas industry, operating as they do without need to comply with the Clean Air or Clean Water Acts. Oh well, I guess they can monitor themselves.

The DRBC did however give the go-ahead to two controversial projects: a $1.2 billion electrical transmission line through 72 miles of Delaware River watershed connecting New Jersey and Pennsylvania substations, and a $6.4 billion project to expand the Philadelphia airport- by filling in 130 acres of wetlands. Wetlands mitigate the effects of disastrous storms like Sandy, which we can expect more of, thanks to climate change. But you can't charge for prudence.

Every time I revisit the airport expansion, the numbers get bigger. There's the usual amount of cheerleading for this project, from the usual cheerleaders- the ones that brought you casinos and the expanded convention center. And I'm sure they all stand to make piles of money. Airport director Mark Gale promises jobs and revenue and a more efficient airport. Let's hope any of that is true. US Airways Vice President Micheal Minerva questioned the proposition back in 2010, so some pretty smart people see things differently. The project now only needs permission from Pennsylvania Department of Environmental Protection (an oxymoron under Corbett) and the US Army Corps of Engineers, so consider it a done deal.

And here, in microcosm, is the problem with solving climate change. There's too much money to to be made doing the same old same old. There's no incentive to change, I mean, unless you like breathing the air and drinking the water. But apparently that's just not as sexy as the old "jobs and revenue" line that gets trotted out by every fill-in-the-blank financially interested party to defend every project that will add more carbon to the atmosphere.

The sticking point with climate change is it's not an environmental problem, primarily, but an economic problem. The entire world's economy revolves around carbon-spewing technologies. And until the kingpins controlling the resources that keep this economy running figure out how to make money in changing, there will be no serious change. Period, the end. Too bad about the air and water.

The natural gas industry is big in Pennsylvania and elsewhere, and is grossly unregulated. The prize the industry promotes is replacing oil with natural gas - liquified natural gas, to be precise. That way cars keep running, factories don't have to retool, there's no need to worry so much about rapid transit, and hey, natural gas is clean, they say, kind of like clean coal (not). Tar sands development in Canada continues at a breakneck pace, although it may not go as smoothly as envisioned. GE recently announced plans to expand "natural gas highway" partnerships and the US government issued a report last week that makes the case for exporting natural gas, which the US now has in surplus. Sure it'll drive up domestic natural gas prices, but ultimately... jobs and revenue. So that's the plan, a natural gas superhighway and exporting the stuff so other countries can build natural gas superhighways. Good old, same old thing.

And nary a word about the hit to the earth's warming climate of these "clean energy" technologies. According to the International Energy Agency the world cannot afford to burn two-thirds of all identified fossil fuel resources. All that new carbon alone will doom the planet. It has to stay in the ground. So what the heck are we all talking about? "Jobs and revenue" is beginning to sound like the ditty Nero might sing as Rome burns.

Earlier this month, countries of the world met in Doha, Qatar under the auspices of the United Nations, to continue their nearly 20 year conversation about what they could or should do concerning climate change. Twenty years of talk and no action. Why? Because there's way too much money to be made doing nothing, and besides, say some, carbon regulation is not the UN's job.

When ordinary people have a concern about the impacts to their well-being of an industry, they naturally turn to their elected political leaders. So it's disappointing when those leaders aren't that interested in protecting public health. Susan Rice, current UN Ambassador, whose name is being floated for Secretary of State, has over a million invested in the Keystone Pipeline, a deal that needs - surprise! - a permit from the Department of State to proceed. It's hard for politicians to care about whether you can breathe air or drink water when they're so busy toting up their own return on investment.

I'm not against jobs and revenue but I've come to highly value breathing air and drinking water. The only force in the world capable of ultimately winning out over all this prevailing wisdom about jobs and revenue and the incredible boon of "clean" fossil fuels is sustained direct action by people. For real change, people will have to push harder, because politicians can talk forever, if you let them.

This is the conclusion many activists have come to across a variety of campaigns like Greenpeace, the Tar Sands Blockade and the new student movement to force colleges and universities to divest themselves of their fossil fuel investments, to name a few. It's surely going to get hotter - literally and figuratively - before health and well-being win out over jobs and revenue.

This article originally published at GreenCityJournal.com.
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By: Caryn Hunt | alternet |

Caryn Hunt lives and writes in Philadelphia.

Why is this inappropriate?