As Argentina finds itself on the verge of a second default, what blame, if any, does the distressed investing community hold?
With the crisis surrounding Argentina’s debt continuing to play out in both the U.S. courts and in Buenos Aires, questions are being asked about who is responsible for the potential economic collapse of this significant and fragile economy. In large measure, the answer depends upon how the protagonists in this decade-long struggle are perceived.
Are the hedge funds spearheaded by Paul Singer and NML Capital Ltd., who purchased Argentinian bonds at rock bottom prices solely to reap massive profits, “vultures?” Are they willing to thwart Argentina’s restructuring to further that aim? Or, are these hedge funds properly exercising their legal rights to maximize the return to their investors? On the other hand, is Argentina merely taking all available efforts to restructure its debt? Or is the country, as the Second Circuit noted, “a uniquely recalcitrant debtor?” Realistically, the answer falls somewhere in the middle.