Default: The Landmark Court Battle over Argentina's $100 Billion Debt Restructuring

by Gregory Makoff

Judge Griesa’s February 23, 2012, order finally woke the market from its deep slumber. EMTA held a seminar devoted to the topic for its members on April 18, 2012,23 for example, while Georgetown’s Anna Gelpern posted commentary on the case to the Credit Slips blog.24 Most observers and market participants were sanguine about how it would turn out, however, assuming that the Second Circuit would shoot down Griesa’s ruling or that Argentina would cave and pay the holdouts if it lost on appeal. The possibility that Argentina might default on $30 billion of performing bonds just to avoid paying Elliott seemed remote. So, the exchange bondholders sat on their hands, expecting the problem to go away. None of them filed motions with the court to head off the ruling, at least not until it was too late.