Editing Holdout problem (section)

===Argentina===

A similar dispute between [[Argentina]] and holdouts has been ongoing since at least the 2005 [[Argentine debt restructuring]].<ref name=reuters>{{cite web|url=https://www.reuters.com/article/uk-argentina-debt-idUSLNE91L00B20130222|title=What Argentina's fight with holdout creditors is all about|work=Reuters|date=February 22, 2013}}</ref> Bondholders that accepted the 2005 swap (two out of three did so, while accepting only about one-third of the bond value in the restructuring) saw the severely reduced value of their bonds rise 90% by 2012,<ref>{{cite web|url=http://www.globalpolicy.org/social-and-economic-policy/the-world-economic-crisis/general-analysis-2/51203-billionaire-hedge-funds-snub-90-returns.html|title=Billionaire Hedge Funds Snub 90% Returns|author=Drew Benson|work=Bloomberg News}}</ref> and these continued to rise strongly during 2013.<ref name=lf>{{cite web|url=http://www.latinfinance.com/Article/3248220/Argentina-Offers-New-Swap-in-Pragmatic-Plan-B.html#.Uh04y23b3m4An|archive-url=https://web.archive.org/web/20130902061705/http://www.latinfinance.com/Article/3248220/Argentina-Offers-New-Swap-in-Pragmatic-Plan-B.html#.Uh04y23b3m4An|url-status=dead|archive-date=September 2, 2013|title=Argentina offers new swap in pragmatic Plan B|work=Latin Finance|date=August 27, 2013}}</ref>

An August 2013 [[United States Court of Appeals for the Second Circuit|appeals court]] ruling in ''Argentina v. NML Capital'', 12-1494, determined that holdouts should be repaid the full face value,<ref>{{cite news|title=Argentina loses $1.3bn debt court appeal|url=https://www.bbc.co.uk/news/business-23832247|date=25 August 2013|work=BBC}}</ref> but without the losses taken by those who had accepted the 2005 and 2010 swaps at a 70%-75% [[Haircut (finance)|discount]].<ref name=reuters/> In October 2013 the Supreme Court affirmed the decision without comment. A second decision of the 2nd Circuit which prohibits payments to creditors who did accept the swap if holdouts are not paid was on appeal to the full panel as of October 2013. This case may also be appealed to the Supreme Court. Enforcement of the decisions is stayed pending a final Supreme Court decision.<ref name=Bloomberg10713>{{cite news|title=Argentina Rejected by U.S. Court in Bond Payment Appeal|url=https://www.bloomberg.com/news/2013-10-07/argentina-rejected-by-u-s-court-in-bond-payment-appeal.html|accessdate=October 8, 2013|newspaper=Bloomberg L.P.|date=October 7, 2013|author=Greg Stohr}}</ref> Courts in Belgium, France, and Germany have backed Argentina on the basis of the [[Pari passu|equal terms]] clause, however.<ref>{{cite web|url=http://www.telam.com.ar/english/notas/201307/39-a-belgian-court-ruled-in-favor-of-argentina-and-against-a-vulture-fund.html|title=A Belgian court ruled in favor of Argentina and against a vulture fund|work=Telam|date=July 11, 2013|url-status=dead|archiveurl=https://web.archive.org/web/20130928011313/http://www.telam.com.ar/english/notas/201307/39-a-belgian-court-ruled-in-favor-of-argentina-and-against-a-vulture-fund.html|archivedate=September 28, 2013|df=}}</ref><ref>{{cite web|url=https://www.reuters.com/article/argentina-debt-france-idUSL1N0FW1NZ20130726|title=France to back legal argument in Argentina case against creditors|work=Reuters|date=July 26, 2013}}</ref><ref>{{cite web|url=http://www.buenosairesherald.com/article/135798/german-court-rules-in-argentina-favour-against-vulture-funds-|title=German court rules in Argentina favour against Vulture Funds|work=Buenos Aires Herald|date=July 11, 2013}}</ref> The lack of [[legal certainty]] is U.S. courts prompted Argentine officials to propose placing the restructured bonds in question under Argentine law, while concurrently announcing a renewed bond swap offer.<ref name=lf/>  However, court decisions outside the US had no bearing on Argentina's debt obligations, since Argentina had sold their debt under US law.

The possibility that holdout creditors can attach future payments on restructured debt and receive better treatment than cooperating creditors distorts incentives and can derail efforts for a cooperative restructuring.<ref name=reuters/> It is likely to be of particular importance in cases in which the creditors are being asked to accept substantial debt and debt service reduction. However, it is unclear given the special circumstances of the Elliot case whether it will be broadly applicable to holdouts in other restructurings.<ref>{{cite web|url=http://blogs.reuters.com/felix-salmon/2013/08/23/elliott-vs-argentina-its-not-over-yet/|archive-url=https://web.archive.org/web/20130823215250/http://blogs.reuters.com/felix-salmon/2013/08/23/elliott-vs-argentina-its-not-over-yet/|url-status=dead|archive-date=August 23, 2013|title=Elliott vs Argentina: It's not over yet|author=Felix Salmon|author-link=Felix Salmon|work=Reuters|date=August 23, 2013}}</ref> The new Argentine government elected in late 2015 gave indications of its willingness to negotiate with the set of thousands of holdout creditors. The Argentine situation has increased awareness of the utility of Collective Action Clauses in preventing or reducing holdout complications in debt restructuring.