Cleary Gottlieb has now defeated the last of many challenges to Argentina’s debt exchange offer, bringing an end to two months of intense litigation activity and permitting the cancellation of over $60 billion of non-performing sovereign debt.
Following the favorable May 2005 appeals court decision denying creditor attachments to seize tendered bonds, Cleary Gottlieb moved to lift the stay on closing of the offer, and sought the immediate issue of the appellate court mandate. Unsuccessful in their arguments against these two actions, the creditors then sought the extraordinary relief of recalling the Court of Appeals’ mandate, claiming that they would otherwise be unable to seek rehearing. The Court of Appeals denied this motion as well.
In a separate action before the U.S. District Court for the Southern District of New York, another creditor sought to attach the collateral from the Republic’s Brady bonds issued in 1992, proceeds of which were to be paid to tendering Brady bondholders. The court denied not only these attachment attempts, but also the subsequent creditor motion to reargue.