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The vultures lost their booty
Pagina/12
June 26, 2009

Courts in Germany and France decided in Argentina's favor in lawsuits initiated by vulture funds to capture assets of the State in those countries. The courts reversed decisions of the first instance in both cases that had been favorable to creditors that rejected the swap of 2005. This way, the accounts were liberated from initial embargoes.

A judge in the Court of Hamburg in Germany proceeded to revoke a decision on March 25th which had blocked funds of multinational companies with branches in Argentina that were to be given to the State as taxes. The original decision was in response to a suit by the holdouts, which now was, in the view of the Hamburg court, not sustained because the judge that had executed the measure lacked international jurisdiction. The court explained that the taxes has jurisdiction in the sovereign territory of the state of origin, in this case, Argentina.

Also lifted was the embargo of the Argentine funds in France which were frozen on April 3rd, from a suit by NML-Elliot. The French court annulled the embargo on those funds, whose destination was, among other things, the Argentine Embassy, the Argentine delegation to UNESCO, the Casa Argentina, the Defense Attache, and the Tourism Office. The Argentine accounts in France had been frozen by a "precautionary embargo for debt." In response, the Foreign Ministry had strongly criticized the fact, adding that the French government itself had qualified as "illegal" the court embargo.

The fund NML-Elliot was the same that last year asked for an embargo on the funds of the ex-AFJP invested in the United States. Repeating its actions in Paris, the company had remarked: "While the Argentine government scorns its obligations to our company, NML will continue pursuing legal means throughout the world."

The holdouts are bondholders that didn't enter the swap proposed by the government of Nestor Kirchner in 2005 and most are owned by vulture funds, dedicated to financial speculation. Those bondholders have filed lawsuits for debt in default. There would be around 700 plaintiffs and it's estimated that they have in their possession or 1/5 of the totality of the debt that was not swapped, coming to about US$20 billion. This time, their game in Germany and France didn't pan out.

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