What happens when you roll the dice and hope that the
US courts will enforce your vulturing of Argentina's debt?
Take their assets in a foreign port.
Of course, then you have to hire a pirate
captain and a swashbuckling crew.
Aye! Matey
checkit: zerohedge
Argentina
Ignores US Court Decision, Will Not Pay Elliott And Holdouts
Submitted
by Tyler Durden on 11/18/2012 13:18 -0500
Several
weeks ago we summarized the highly entertaining (if largely futile) fight
between naval commodore second class Paul Singer of Her Majesty's Elliott
Capital Navy, and the defaulted and soon to be re-defaulted state of Argentina.
The punchline, much to the chagrin of all those other "sophisticated"
bloggers who read so very much into the recent decision of the 2nd Circuit
Court of Appeals, was the following: "What this really means is that
Western courts have decided that Elliott has not been stripped of pre-petition
rights despite, or rather in spite of, holding out, and is entitled to
collecting up to par recovery. There is one problem: there is absolutely no
enforcement mechanism! And therein lies the rub: because how does a court
located on Pearl Street in New York order the Argentina State Treasurer located
in Buenos Aires to wire a payment on bonds, via intermediary banks, that
Argentina effectively has disowned? It can't." Today, Argentina just made
it very clear that once again those desperate for page views by analyzing and
overanalyzing an utterly meaningless court decision's implications for rogue
sovereign debtor will have to try even harder, following Reuters' report
confirming precisely what we said would happen - that Argentina would completely
ignore the appeals court decision, and not pay holdout, read Elliott,
bondholders.
Now
comes the realization that in a broke sovereign world, pretty much anything
goes, unless enforced by trade (or naval) blockades, and/or, well, war. And as
long as the impaired party is simply a uber-prosperous hedge fund, the
probability of either happening is negligible. Said party, however, may
continue confiscating Argentinian ships at will: hopefully it is capable of
creating an efficient clearing market for three-mast frigates.
