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Argentine ship stuck in Africa in bondholder fight

Associated Press Modified: October 4, 2012 at 12:46 pm •  Published: October 4, 2012

BUENOS AIRES, Argentina (AP) — The flagship of Argentina's navy has been ordered held in Africa by a judge answering a complaint from a U.S. hedge fund.

The Argentine foreign ministry describes the fund as if it were led by modern-day pirates, saying the seizure violates international law and that President Cristina Fernandez will not bend to extortion.

Diplomats are working with the African government to "clarify the trickery that these unscrupulous financiers have mounted," the ministry said.

The A.R.A. Libertad is a three-masted tall ship that stopped at the port of Tema, near Ghana's capital of Accra, while training hundreds of navy cadets.

That's where Elliott Capital Management, a $15 billion hedge fund run by billionaire Paul Singer, caught up with the Argentines. The fund's lawyers have searched worldwide for ways of collecting on Argentine bonds bought at fire-sale prices after the South American country's record debt default a decade ago.

Most bondholders eventually agreed to cancel Argentina's bad debts for about 30 cents on the dollar, but Singer is among those holding out for the full promised value of those notes, plus interest. Courts in the United States and Britain have granted judgments worth $1.6 billion to the hedge fund, but it and other bondholders are still suing for billions more and Argentina has refused to pay.

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