Unless the plaintiffs request a stay (and quick!), this will probably be the last request for Judge Griesa to stay the injunction before Argentina defaults officially fails to put money into the bank accounts of exchange bondholders. It is an emergency motion to stay filed by Knighthead Capital Management and other holders of euro-denominated bonds. They want the judge to stay the injunction for at least 90 days, so that they can try to round up votes to waive the RUFO clause, or through the end of the year, when the RUFO clause expires. They add that "a stay would not affect the plaintiffs at all, since they have not been paid since 2001..."

Credit Slips
(posted 1 hour 43 min ago)

Ordinarily, when a Judge tells a lawyer that he needs to be somewhere, the lawyer recognizes the need to be there. Here’s a case where the lawyer will learn that lesson the hard way. You can find the Order here.
JR-order resetting COP
It is the rare lawyer who dictates to the federal court, or any state court, when he is willing to participate in a scheduled hearing. It is an even rarer occasion that a lawyer having received an order from the federal court setting a hearing, files a pleading which says “[d]ue to scheduling conflicts and lack of time to make arrangements both counsel and [the client] are unable to appear at the Change of Plea Hearing currently set for July 29, 2014, at 9:45 am.” Perhaps such hubris would be understandable if some critical event prompted the injudicious pleading. But, reasoning that “[d]ue to a vacation, medical issues, a root canal and hundreds of emails–counsel inadvertently missed the email setting the Change of Plea Hearing in this case[,]” does not meet any standard except that of
extraordinary hubris, a standard not usually recognized in judicial proceedings. In the event that the Court’s concern is not evident, such behavior by a lawyer is unacceptable, unprofessional, and unfortunate.

(posted 2 hours 55 min ago)

As Argentina finds itself on the verge of a second default, what blame, if any, does the distressed investing community hold?

The distressed investing community holds no blame for Argentina’s risk of default.
When issuing a bond, a country makes a promise to repay its creditors on time and with interest. If Argentina is unable to do so, that’s certainly not the bondholders’ fault. The fact that the economic crisis of 1998-2002 that precipitated the original default in December 2001 stemmed from circumstances beyond Argentina’s control does not shift blame to the country’s creditors for the present crisis, nor does it create any obligation for them to agree to a massive write-down of their bond holdings.

WSJ.com: Bankruptcy Beat
(posted 4 hours 32 min ago)

Because there is additional proof needed to show undue burden, the majority of those individuals who file bankruptcy do not file the additional adversary proceeding necessary to receive a discharge. This accounts for very low number of student loan discharges given to debtors by bankruptcy courts each year. The post Student Loan Debt and Bankruptcy appeared first on Tucson Bankruptcy Attorney.

(posted 4 hours 37 min ago)

I name names and point fingers in the Wall Street Journal.  NML gets some blame for overplaying its hand, but the fault primarily lies with the federal courts for letting the case go forward. I understand the courts being angered by an unrepentant debtor thumbing its nose at them, but the federal courts should know better than to get into a pissing match with a foreign sovereign. Federal judges are possessed of awesome powers, but not that awesome. It's not at all clear to me how Judge Griesa's going to get this case out of the hole he dug, and the recent reporting on the case indicates that he doesn't have any idea either. "We're in the soup."  Indeed. 

Credit Slips
(posted 4 hours 59 min ago)

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.

WSJ.com: Bankruptcy Beat
(posted 5 hours 6 min ago)

Payments startups may be fast and smart, but banks have compliance know-how, an established customer base and physical branches that will help them hook customers on new products.

BankThink
(posted 5 hours 51 min ago)

As Argentina finds itself on the verge of a second default, what blame, if any, does the distressed investing community hold?

Through its decision not to hear an appeal of a lower court’s findings, the U.S. Supreme Court appears to concur that Argentina’s pending default will be what it will be: a default. In the case of Argentina, if, as it’s been rumored, certain investment funds have encouraged the country’s economic advisers to press their case and ignore prior debt commitments, then the pending default may be attributable to such ill-founded advice. But to assign blame for a debtor’s default to a creditor—short of really extenuating circumstances which are not apparent here—seems akin to blaming corporate ineptitude leading to bankruptcy on the high-yield markets. Once assumed, contractual obligations are to be honored.
Anders J. Maxwell is a managing director in the restructuring & recapitalization group at New York-based investment banking advisory firm Peter J. Solomon Co.

WSJ.com: Bankruptcy Beat
(posted 5 hours 52 min ago)

As Argentina finds itself on the verge of a second default, what blame, if any, does the distressed investing community hold?

The blame for Argentina’s impending default lies primarily with the U.S. courts, not with the distressed debt investing community. Distressed debt investment funds that buy into repudiated sovereign debt know exactly what they are doing and the risks they are taking. Their goal is to extract payment from the debtor by being a sufficiently squeaky wheel that the debtor will pay to make the investor go away. Sometimes it works, but only if the distressed debt investors do not press the debtor too hard; the debtor needs to have the flexibility to be able to cut a deal. If backed into a corner, no deal may be possible.

WSJ.com: Bankruptcy Beat
(posted 6 hours 21 min ago)

Canons of statutory construction are used frequently to resolve ambiguities in the Bankruptcy Code. In a recent decision arising out of the Madoff liquidation, Judge Rakoff of the Southern District of New York had to implement more than a few to creatively resolve a potential conflict between the Bankruptcy Code and the Securities Investor Protection Act (SIPA). He also had to take a practical, yet expansive, view of what the word “prompt” can mean when managing the untangling of one of the largest financial frauds in American history.
The Facts

(posted 6 hours 31 min ago)