US court puts rights of billionaire investors above people of Argentina

Campaigners slam court decision for allowing Argentina to be ‘held to ransom’ by vulture funds.

Argentina has lost its appeal in New York against ‘vulture funds’ NML Capital Ltd and Aurelius Capital. The judgement brings Argentina one step nearer to a default.

The New York appeals court upheld a ruling that Argentina must repay the vulture funds every time it repays its standard creditors, and forces banks processing such payments to comply with the order. It leaves Argentina with a choice between paying vulture funds which speculated on the country’s bankruptcy back in 2002 and which is forbidden by Argentine law, or triggering another default.

Any default will be put off until the US Supreme Court decides whether it will hear an appeal of the case.

Nick Dearden of Jubilee Debt Campaign said:
“It cannot be right that this court has put the rights of a couple of billionaire speculators above the rights of millions of people in Argentina to enjoy a decent standard of living. A whole country is being held to ransom by these vulture funds.

“These funds never lent money to Argentina. They speculated on Argentina’s crisis, buying debt very cheap in the hope that the country would go bankrupt, and then refusing to join the vast majority of Argentina’s ‘creditors’ in negotiating a reduction in the value of their debt.

“The US Government and International Monetary Fund must take their share of the blame for this decision, as both pulled back from asking the Supreme Court to review the matter, sending a clear message that they were washing their hands of it.’

“If countries want to protect their right and duty to represent their people they must stand up against this bullying.”

For comment contact Nick Dearden at Jubilee Debt Campaign ++ 44 (0)7932 335 464


In 2001 Argentina defaulted on unaffordable debt payments. At the time the Argentinian people had experienced three years of recession and over half the population, 20 million people, were living below the poverty line. Much of the debt from this time was regarded as illegitimate by Argentina’s people, originating in the brutal dictatorship of the late 1970s and early 1980s, a period known as the ‘dirty war’ when 30,000 people were ‘disappeared’.

The Argentine government subsequently reached a deal with most creditors to pay the equivalent of 25-35 cents on every dollar owed, over several years. However some creditors refused to accept this deal, known as ‘holdouts’. These holdouts include vulture funds such as NML (a subsidiary of Elliot Associates), which are thought to have bought Argentinian debt at knock-down prices during the early 2000s debt crisis, and are now suing for exorbitant profits. Argentina is making debt payments to the creditors which accepted the deal, but not the holdouts.


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