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The long-running dispute continues between the Republic of
Argentina, which defaulted on its sovereign debt for the second
time in July 2014, and holdout bondholders from two previous debt
restructurings.
On October 5, 2015, the U.S. Court of Appeals for the Second
Circuit upheld U.S. district court judge Thomas Griesa's
October 27, 2014, order denying requests by two groups of judgment
creditors holding defaulted bonds issued by Argentina for an order
forcing Bank of New York Mellon, in satisfaction of the
Republic's judgment debt, to turn over $539 million that
Argentina had deposited in 2014 to pay creditors who participated
in its past debt restructurings. In its summary rulings (here and here), the Second Circuit agreed with Judge
Griesa's ruling that, even assuming the turnover provisions in
New York law applied to the funds, such a turnover would be barred
by the Foreign Sovereign Immunities Act.
On October 16, 2015, Argentina's holdout bondholders,
alleging that the Republic waived its privilege by failing to
comply with Judge Griesa's August 13, 2015, order directing
Argentina to identify privileged documents within 10 days, asked
the judge to issue an order compelling Argentina and its counsel to
produce all documents and information responsive to discovery
requests seeking information concerning Argentina's U.S.
assets. The bondholders claim that the privilege log submitted by
Argentina does not comply with the court's order, which
expressly provided that the Republic's failure to produce a
timely privilege log " 'will be deemed to be a waiver of
the claim of privilege.' "
Greece
On August 14, 2015, eurozone finance ministers approved €86
billion ($96 billion) in new bailout loans for Greece. This third
round of bailout financing in five years capped six months of
turbulent negotiations between Greece's left-wing government,
led by Prime Minister Alexis Tsipras, and Greece's creditors,
including the European Central Bank (the "ECB") and the
International Monetary Fund. Without a deal, Greece and the
19-nation eurozone confronted the prospect of
"Grexit"—Greece's forced departure from the
currency union.
The aid deal still faces major obstacles. On August 20, 2015,
embattled Prime Minister Tsipras, in a gamble aimed at bolstering
his power and ability to implement the bailout deal, resigned to
clear the way for early elections slated for September 20. He was
forced to call snap elections due to the large-scale defection of
Syriza party lawmakers during the parliamentary vote on August
14.
On September 20, 2015, Tsipras was returned to power by Greek
voters, many of whom stated that Tsipras had fought hard to get
them a better deal from the nation's creditors and deserved a
second chance at governing. The new government now faces the
challenges of implementing unpopular austerity measures mandated by
the bailout deal, including carrying out steep budget cuts,
lobbying for action by other eurozone countries to ease
Greece's debt load, and dealing with the added financial strain
of Europe's refugee crisis.
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