BUENOS AIRES - The US government has backed Argentina in the latest legal battle over a 2002 default, arguing the nation should not have to pay "holdout" creditors when servicing debt held by investors who accepted a harsh restructuring, court documents show. Argentina declared a world-record sovereign default during an economic meltdown a decade ago. It faces numerous lawsuits in US courts by creditors who spurned past government swap offers and have sued to recover the full value of the defaulted bonds. About 92 percent of Argentina's defaulted debt has been restructured through swaps carried out in 2005 and 2010. The country has steered clear of global credit markets since the default, partly because of the pending litigation. On Feb. 23, U.S. District Judge Thomas Griesa in Manhattan ordered that Argentina pay holdouts, including NML Capital Ltd and Aurelius affiliates, each time it services the debt issued in the swaps. This followed two related rulings from December. Argentina quickly moved to appeal the decision. On Wednesday, US government lawyers filed an "amicus curiae" or friend-of-the-court brief, asking that the 2nd U.S. Circuit Court of Appeals reverse Griesa's rulings, according to documents obtained by Reuters and reported in the Argentine media on Friday. The judge's orders "could enable a single creditor to thwart the implementation of an internationally supported restructuring plan, and thereby undermine the decades of effort the United States has expended to encourage a system of cooperative resolution of sovereign debt crises," US lawyers wrote.
