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Argentina could be fined in debt litigation-US judge

Published 06/01/2009, 11:57 AM
Updated 06/01/2009, 12:23 PM

NEW YORK, June 1 (Reuters) - A U.S. judge could fine the government of Argentina after he found it in contempt of court in litigation brought by holders of its defaulted bonds, according to a court order entered on Monday.

U.S. District Judge Thomas Griesa granted a contempt of court motion by bondholder Aurelius Capital Partners hedge fund for the failure of Argentina and its social security agency, Anses, to provide information about the transfer of nearly $206 million in April, in violation of court orders.

"It is further ordered that while the court has not imposed monetary sanctions at the present time, the court reserves the possibility of imposing such monetary sanctions against the Republic at a later date," said the judge's order, dated May 29 and entered in the court record on Monday.

Argentina has been locked out of international debt markets since its 2002 sovereign default and bondholders have fought in court to recover assets they have already won in judgments.

According to a transcript of a May 27 hearing in the case, lawyers for Aurelius complained that they had not received documents Griesa had ordered Anses to provide about transactions it made through a private brokerage [ID:nN31441244].

Griesa has previously rejected arguments that the agency, which took control of Argentina's pension assets in the United States, was separate from the government. He has frozen part of those assets held in the United States as bondholders sought to seize government assets overseas.

A lawyer for Argentina, Carmine Boccuzzi, could not immediately be reached for comment on Monday. Officials at ANSES were not immediately available for comment.

According to the transcript, Boccuzzi told the judge that the economic ministry had asked Anses for the information,

"Anses, consistent with its view that it is not subject to the jurisdiction of this Court and otherwise has sovereign immunity protections as it were, said 'No,'" Boccuzzi said.

In recent months, Argentina's treasury has been relying for financing on the state-run pensions administrator, Anses, which is flush with cash after the government nationalized private pension fund assets in late 2008.

Argentina's debt load neared $146 billion by late 2008 and it faces some $28 billion in obligations due this year.

The case is Aurelius Capital Partners LP v The Republic of Argentina 07-2715 in U.S. District Court for the Southern District of New York (Manhattan) (Reporting by Grant McCool; Additional reporting by Kevin Gray in Buenos Aires; Editing by Dan Grebler)

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