By Bianca Fernet, Argentina

Argentina’s infamous “vulture funds”, as the holdout creditors represented by Paul Singer’s NML Capital are affectionately known, are back at their usual antics of trying to claw back from the Argentine government what they (and the US court system) see as rightfully theirs.

But these holdouts lost a critical battle last week in the courts of the United Kingdom, where London Judge David Richards ruled that the Bank of New York, rather than Argentina, was responsible for not making payments on Argentina’s bonds issued under UK law. In the eyes of the British court, Argentina has made the payment and the onus of distributing the funds to the bondholders falls on BoNY.

This ruling does not obligate the New York bank to process the payment, which would put them in between the rock and the hard place of obeying one court or the other. It does, however, clearly state the opinion that Argentina is most unequivocally not in default. This will allow Argentina to issue debt in the United Kingdom at lower than 10 percent interest by reducing the risk premium investors place on the country.

The holdouts continue their onslaught in both the courts of public opinion and the court of the State of California. The American Task Force Argentina (ATFA) group published an “Index of the Enrichment of the Argentine Government” detailing the alleged enrichment by corruption of 14 current and former government members. This report uses public domain tax and official statements, simply presented in a pointed manner that has been decried by Economy Minister Axel Kicillof as “mafia tactics that will not work.”

In the State of California, Circuit Justice Jeffrey Steven White has agreed to hear NML’s argument that the application of the “discovery” clause should extend to oil company Chevron’s assets. Quite a jump, yes?

The reasoning is that via Chevron’s joint venture with state-owned YPF in Vaca Muerta, Chevron’s assets necessarily both indirectly and directly contain funds from the Argentine state and should thus be frozen. This case has an ice cream cone’s chance in hell of going anywhere, but puts strain on Argentina as it dissuades future investment in the country from American firms as well as mucks up their relationship with Chevron, as no one save lawyers relish expensive, long, painful lawsuits that could result in losing millions of dollars.

To sum up, the vultures want everyone to know they’re still a thing and are after Chevron, the government still steals money and pretends it doesn’t, and the U.S. looks to be alone in viewing Argentina’s lack of settlement with the vulture funds as a default. By Bianca Fernet, Argentina

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.