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Here's the (edit: Proposed) Contempt Order

posted by Mark Weidemaier

Edit: Oops... my automatic docket feed and determination to post before my morning class got the best of me. This is a proposed order, not signed as yet by the judge.

At a hearing on September 29, Judge Griesa indicated that he would hold Argentina in contempt of court but deferred his ruling on what the sanction would be. He has now issued the sanctions order. Somewhat surprisingly, the order does not impose even a monetary fine. (Perhaps the judge is not eager to deal with Argentina's inevitable noncompliance?) Instead, the order simply declares that Argentina will remain in contempt until it (i) "reaffirms and confirms" BNY-Mellon as trustee and (2) terminates any local trustee appointed as part of the already-not-too-attractive plan to let investors swap into local bonds. The order concludes by noting that the court "will consider the imposition of sanctions upon further application by Plaintiffs."

This is clearly an intermediate step, certainly as the plaintiffs view it. Footnote 5 of their contempt brief noted that Argentina would probably defy any order to pay a monetary fine and alluded to the possibility of additional, unspecified "non-monetary sanctions." What those sanctions might be is anybody's guess for now, but the real fireworks will begin when the plaintiffs propose them. For now, the judge has already ruled that the planned swap violates the injunction, so I don't expect this current order to make much difference.


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