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New York judge: Special master will oversee negotiations between Argentina, debt bondholders

NEW YORK, N.Y. - A special master was appointed Monday to preside over negotiations between Argentina representatives and U.S. bondholders aimed at ending a long dispute over $1.5 billion in debts.

U.S. District Judge Thomas Griesa in Manhattan appointed Daniel A. Pollack to conduct and preside over the talks. Pollack is a Harvard Law School-trained litigator with decades of experience in financial cases.

The appointment came after a lawyer for Argentina, Carmine Boccuzzi Jr., said in a letter to the judge that Argentina "wants to emerge from the litigation that has burdened both it and the courts."

"The republic is committed to a dialogue that will be followed by what the republic intends to be a resolution of this litigation and the entirety of its outstanding debt burden, which is a matter of public interest to all Argentine citizens," he said.

Boccuzzi said Argentina is willing to negotiate in good faith, but he asked the judge to suspend financial penalties during negotiations. The judge did not immediately rule on the request.

The plaintiffs in the New York litigation represent about 1 per cent of Argentina's $100 billion of debt that went into default in 2001. About 92 per cent of creditors joined 2005 and 2010 debt swaps, agreeing to accept less money. Another 7 per cent of those who did not join the swaps did not sue Argentina and are not part of the U.S. court case.

Holdout bondholders from U.S. hedge funds that sued in Manhattan federal court were led by New York billionaire Paul Singer's NML Capital Ltd. A lawyer for NML did not immediately return a message seeking comment Monday.

Argentina was forced to the negotiating table after the U.S. Supreme Court rejected its appeals of the judge's rulings that ordered the country to make payments on the debt.

Argentina's economy minister, Axel Kicillof, said the judge needs to suspend that ruling if Argentina makes payments to other bondholders as required on June 30.

"A suspension measure is essential so Argentina can continue to pay all of its restructured bondholders normally," Kicillof said. "And we can continue the dialogue that we need under equal conditions so that 100 per cent of the creditors can be paid, especially those that we have restructured and that we need to pay in the coming date."

An attorney of the Washington Legal Foundation, which has lobbied for the hedge funds involved, said it's not surprising Argentina would like to "delay its day of reckoning as long as possible."

"But the issues raised by Argentina have now been decided against it by the American courts, and the judicial process is exhausted," attorney Richard Samp said. "All that remains to be negotiated is the terms of payment."

He said there's no possibility the holdouts would "agree to the lengthy sort of delay that Argentina appears to be contemplating."

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Calatrava reported from Buenos Aires. Associated Press writer Luis Andres Henao in Santiago, Chile, contributed to the report.

The Canadian Press


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