NEW YORK (AP) — A federal judge Tuesday ordered around-the-clock negotiations aimed at averting a second debt default by Argentina in 13 years, saying a default would hurt "real people."
U.S. District Judge Thomas Griesa in Manhattan issued the order from the bench after describing why Argentina must live up to documented promises it made to bondholders it now demonizes as "vultures" before it experienced a record $100 billion default in 2001.
He said nonstop negotiations set to begin at 10 a.m. Wednesday were the best way to deal with complex issues because a default "is about the worst thing that ... I can envision."
"I don't want that to happen," he said. "People will be hurt by that, real hurt. Not vultures being hurt but real people will be hurt."
Jonathan Blackman, a lawyer for Argentina, said the issues were too complex to resolve by the July 30 deadline and thus a settlement "simply can't be done by the end of this month."
He said one problem is that U.S. bondholders who are owed $1.5 billion after refusing to exchange their bonds for lower-valued bonds after the 2001 default are insisting they receive 100 percent of what they are owed.
"We want to negotiate a settlement with everyone, but to do that requires movement," Blackman said.
He said that until the end of this year, the 92 percent of bondholders who exchanged their bonds are entitled to whatever improved treatment is given to bondholders who did not exchange for lower rates.
He renewed Argentina's request for a stay of Griesa's orders, but the judge quickly rejected that.
"In my view, the stay application is not something necessary to a negotiation or settlement," Griesa said.
He also said "every single problem" described by Blackman can be dealt with in a settlement aimed at averting default.
"There are ways to somehow avoid a default," the judge said.
He said lawyers must meet "promptly and continuously." But he added: "I don't mean anything absurd. I don't mean that the finance minister of the Republic of Argentina has to personally be in New York 'round the clock, of course. But he undoubtedly has staff."
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