And Griesa proposed an unprecedented mechanism for forcing Argentina to pay: using the U.S. funds transfer system to reroute the payments Argentina has faithfully made to all the other bondholders if it hasn't already paid the plaintiffs beforehand. That mechanism prompted a flood of legal briefs from U.S. banks, the Federal Reserve, the U.S. government and other institutions, warning that forcing Argentina to pay this way could do serious collateral damage to their interests.
Argentina's previous swaps offered new bonds initially worth less than 30 cents for each dollar of bad debt. But since then, these "exchange bondholders" have been gradually made whole: Those who took the deal in 2005 have already received 71 cents for each dollar they invested in the 1990s. Some bond analysts have suggested that a new debt swap would start by giving the plaintiffs at least that much, and then pay the rest in quotas.
However, experts aligned with the American Task Force Argentina, a Washington lobbying group funded by Singer, said before Wednesday's hearing that Argentina's debt swap offer came in too little, too late to be seriously considered by the appellate court.
Associated Press Writer David Caruso in New York contributed to this report.