US justices seek middle ground in Argentina case

Published on NewsOK Modified: April 21, 2014 at 12:22 pm •  Published: April 21, 2014

WASHINGTON (AP) — The U.S. Supreme Court appeared to be searching for a middle ground Monday in the decade-long battle between Argentina and holders of its defaulted bonds.

The justices heard arguments on a relatively narrow aspect of the issue, the question of whether a sovereign nation can be forced to reveal assets around the world so plaintiffs can collect on U.S. court judgments.

The court seemed inclined to narrow lower court orders in favor of the bondholders to exclude diplomatic, military and national security property owned by Argentina. At the same time, the justices indicated they might uphold the orders as they apply to commercial property outside the United States.

The court offered few clues about the larger case involving the same players: Argentina's appeal of a $1.4 billion judgment that it says could destroy the country's economy and also damage the U.S. financial system. So far, lower courts have backed hedge fund NML Capital Ltd., which won an unprecedented judgment that would block Argentina's payments to many other bondholders unless it pays cash first to the plaintiffs.

The high court probably won't even decide whether to hear that case before June. It is expected to decide the current case by then as well.

On Monday, the justices expressed discomfort with the positions of both the bondholders, who want information about everything Argentina owns around the world, and Argentina, which claims protection from having to reveal the information under a U.S. Foreign Sovereign Immunity Act. The Obama administration is backing Argentina and Justice Department lawyer Edwin Kneedler told the justices that a ruling for the bondholders could complicate U.S. foreign policy and endanger U.S. interests overseas.

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