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If you think that hedge funds around the world stand in solidarity with Elliot Management Paul Singer in his challenge to the Argentine government, think again.According to the New York Post, there are hedge funds that also hold Argentine debt that wish Singer would let this ship sail out of the Ghanaian port where its been held since last month.
Sean O’Shea, lawyer for Gramercy Funds Management, told Manhattan federal court judge Thomas Griesa that his fund was “the one(s) being held hostage” because the Court granted Singer a stay that requires Argentina to pay him the $1.3 billion he is owed in December.
Back when Argetina defaulted in 2001, O’Shea’s clients had agreed to accept 30 cents on the dollar when. Singer, and other hedge funds like his, did not.
The hedge funds that did restructure fear that if Singer gets his way, they won’t get paid at all.
The exchange bondholders like Gramercy fear that if Argentina doesn’t pay Elliott — which President Cristina Kirchner has vowed never to do — they either won’t get paid or will get only a partial amount. That could lead to further litigation and a possible default by Argentina.
“All we want to do is get paid. We’ve already taken a severe haircut. How does it solve the problem by giving them 100 per cent out of our hide?” said O’Shea, who is talking to 20 other institutional investors about intervening in the case.
The Bank of New York has something at stake here too. They’re the trustee for bondholders like Gramercy so if they don’t pay out, they could get sued. We’ll let you if we find out anything interesting about that.
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