Overview
On Friday, as part of the long-running litigation against Argentina concerning its bond defaults, Judge Griesa granted injunctive relief to a series of follow-on (or “me too”) plaintiffs, along the same lines as the injunction entered for the lead plaintiffs in 2013. The injunction requires Argentina to treat the bondholders equally, or parri passu, with other external debt. According to Bloomberg, this adds $6 billion in additional claims. Judge Griesa rejected Argentina’s argument that the relief “would subject the Republic to an unacceptable degree of catastrophic risk”:
Again, the Republic fundamentally misapprehends the nature of the pari passu clause and these injunctions. The injunctions are not meant to coerce payment—they seek to fulfill a promise to treat the Republic’s obligations under the [bond documents] equally with its obligations on other external indebtedness, both in ranking and through ratable payments. The pari passu clause does not ensure that plaintiffs’ bonds will be paid in full—or even paid at all. Rather, it ensures that if the Republic chooses to pay some external indebtedness, it must pay the same ratable share to plaintiffs. The Republic can comply with the injunction even if it never pays plaintiffs, so long as it affords the same treatment to other holders of its external indebtedness.
