By Aldo Caliari
Director, Rethinking Bretton Woods Project - Center of Concern
Co-Chair, Jubilee USA Network Board of Directors
In June of this year, the US Supreme Court extinguished the last hope that a US judge’s ruling handing “vulture funds” a victorious precedent to sue poor countries and make extraordinary profits at the expense of debt relief granted by other creditors, could be reversed.
Less than three months later, debt justice campaigners had reason to celebrate that something good may come out of it, after all. The UN General Assembly, in a historical vote held on September 9th, adopted a resolution to initiate negotiations towards a multilateral legal framework on sovereign debt restructuring.
The ruling had been part of a case “vulture fund” NML initiated against Argentina. This fund had acquired Argentine sovereign debt bonds after the 2002 default and had not accepted the terms of the agreement reached by Argentina with over 92 per cent of the bondholders in 2005 and 2010, and sued in US courts for payment of a 100 per cent of the instruments value plus interest aiming to achieve what, at the current moment, represents a 1600 per cent return on their original investment.