1-10-14 3:54 PM EST | Email Article
By Brent Kendall

The U.S. Supreme Court on Friday agreed to decide whether a holdout creditor for Argentina should be allowed to seek bank records about the country's international assets, a case stemming from Argentina's historic 2001 default.

The court, in a brief written order, agreed to hear an appeal by Argentina seeking to stop Elliott Management Corp.'s NML Capital Ltd. from obtaining records on accounts maintained by Argentina and leading public officials, including its president, Cristina Kirchner.

NML was among a group of holdouts that chose not to participate in the country's debt restructuring. The firm, which says it has obtained more than $1.6 billion in legal judgments against the country, is seeking records on Argentine assets from Bank of America Corp. and Banco de la Naci��n Argentina. NML said it wants the records to learn how Argentina moves its assets around the world, and to identify places where it could seek to collect on its judgments.

Argentina blasted NML's discovery campaign as an unwarranted and intrusive move by a "vulture" hedge fund that is seeking to collect full value on distressed Argentine debt it bought at deeply discounted prices.

Lower federal courts in New York approved NML's subpoenas to the banks, rejecting Argentina's argument the records requests infringed on its sovereign immunity. NML already has begun receiving some bank documents, according to court papers.

The Obama administration filed a brief last month urging the Supreme Court to hear the case, saying the lower court rulings were incorrect and could raise significant foreign policy concerns. U.S. Solicitor General Donald Verrilli said the government didn't condone Argentina's refusal to pay up on U.S. court judgments, but said the lower court rulings imposed worrisome burdens on a foreign state.

NML and other holdouts have pursued collection claims against Argentina in courts around the world, even temporarily seizing an Argentine navy training ship in Ghana in 2012.

Separate from the records case, a high-stakes courts battle between Argentina and creditors could land at the Supreme Court soon. The New York-based 2nd U.S. Circuit Court of Appeals ruled last year that the country can't make payments on its restructured debt unless it also pays the holdouts, something it has vowed not to do.

Argentina is expected to seek Supreme Court review of that ruling. Its petition to the high court is due by mid-February.

Oral arguments in the bank records case will likely take place in April, with a decision expected by the end of June.


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January 10, 2014 15:54 ET (20:54 GMT)

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