Jubilee USA Files to Supreme Court in Landmark Debt Case
Jubilee USA Network and 75 other religious and development groups are filing an Amicus or a friend-of-the-court brief with the US Supreme Court in the famed case between Argentina and NML Capital. The case is destined to impact people living in extreme poverty in every corner of the world. The full list of the 75 groups and the actual filing will be available on Jubilee USA’s website on Monday once the case is officially filed.
Kent Spriggs, the attorney representing Jubilee USA and 75 other US groups in the filing, said that the issue urged upon the Court raises the question: “Do we believe in a financial system that protects the poor and is accountable to all, or do we believe it’s ok to allow extreme actors to take advantage of the most vulnerable.”
The Financial Times has called the case the “debt trial of the century.” Argentina has asked the US Supreme Court to consider overturning a US 2nd Circuit Court judgement ordering Argentina to pay $1.33 billion to predatory hedge funds and holdouts led by NML Capital. The precedent the case sets impacts poor countries in financial distress and allows a small group of hedge funds to target debt relief assets that benefit vulnerable populations.
“The case impacts some of the poorest people in the world,” commented Aldo Caliari of the Center of Concern and Jubilee USA board member. “It also has consequences for global financial stability.”
In addition to noting the impact the Court’s decision would have on vulnerable populations, Jubilee USA’s amicus brief argues that the behavior of these predatory hedge funds harms global financial stability, undermines core bipartisan United States policy and cites the International Monetary Fund is against such behavior.
The Supreme Court would likely decide by the summer whether or not it will actually hear the case. In a separate case currently before the Supreme Court, Argentina sought review of a lower court decision allowing NML Capital to target assets outside of Argentina. The United States filed an amicus brief in support of Argentina, arguing that Argentina’s assets are immune from seizure under federal sovereign immunity law. These cases go back to 2001, when Argentina defaulted on roughly $81 billion in debt. Multiple hedge funds purchased debt for pennies on the dollar. These hedge funds are called “vulture” funds because they prey on countries in financial distress and target assets that benefit poor populations. The nearly 93% of bondholders who restructured their debts with Argentina have seen the value of their bonds increase. The holdout hedge funds that are suing Argentina refused the deal several times and have instead sued for the full amount of the debt they purchased.
Eric LeCompte, Executive Director of Jubilee USA reiterated, “While profiting off the backs of the world’s most vulnerable, these predatory funds seek to dismantle more than 15 years of bipartisan US debt policy.”