Published On: Sun, Aug 31st, 2014

George Soros et al Suing Bank of NY Mellon over Argentinian Debt

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Bank of New York Mellon is in the middle of the ongoing Argentine debt crisis, along with bondholders after the Argentine government denied the bank’s right to operate in the country. BNY has been an intermediary between the Argentine government and its bondholders, and held onto a $539 million payment due to bondholders with the authority of a U.S. court.

The U.S. court ruled that Argentina could not pay creditors who accepted discounts unless it also paid those who rejected bond swaps. Last month, the government of Argentina defaulted for the second time in a decade, but said that the holders of exchange debt go to Bank of New York Mellon for payment.

A lawsuit has been filed in London’s high court by Knighthead Master Fund, RGY Investments, George Soros’ Quantum Partners and Hayman Capital Master Fund to put pressure on U.S. District Judge Thomas Greisa who has presided over the Argentine crisis with  an exemption of bonds that fall under jurisdictions outside of the United States.

The plaintiffs, who argue their debt amounting to $1.3 billion euros say that the funds are euro-denominated and should not be ruled upon by a court in the U.S. Judge Greisa says the interest payments go through Bank of New York Mellon, and can be ruled on in the U.S. BNY Mellon said the suit filed against it was “without merit.” In the meantime, Argentina’s Congress has voted to revoke BNY Mellon’s authorization.

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