As Argentina finds itself on the verge of a second default, what blame, if any, does the distressed investing community hold?
Argentina borrowed money pursuant to certain terms and conditions. It failed to meet its obligations under those borrowings, thereby activating debt holders to exercise their contractual rights. Despite its efforts, Argentina was not able to persuade all of the debt holders to compromise and resolve their claims. The holdout debt holders have relied upon their contractual rights and they have been upheld by a series of court decisions. Enforcement of legal rights does not give rise to the stigma of blame. The issue of whether the holdout debt holders should have a “social conscience” is a wholly different subject bristling with many vagaries and different philosophies that it cannot be definitively answered. Complicated and ambiguous social and moral issues should not give rise to the attribution of blame. Blame is an inappropriate characterization in the circumstances that prevail.
Harvey Miller is a senior partner of Weil, Gotshal & Manges based in its New York office.
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