Jubilee USA holds Vigil Against Vulture Funds outside New York Courthouse
February 28th, 2013
Yesterday, Jubilee USA stood with the poor and against vulture funds at the New York 2nd Circuit Court of Appeals – the last stop before the Supreme Court. Anti-debt supporters held a vigil outside and observed with hundreds of people packed into the courtroom, and several overflow rooms.
The media have been very interested in the story. Agence France-Presse (AFP) quoted Jubilee USA Executive Director, Eric LeCompte: “We pray that they will side with the people of Argentina, the US government and the world’s poorest people. If the judges rule in favor of these hedge funds, it will mean these funds will more aggressively target poor countries in fragile financial recovery. If they rule with Argentina, it will mean that it will be harder for these types of funds to exploit countries in financial distress.”
In addition to Jubilee USA’s vigil outside the US Court, Jubilee South organized an amazing demonstration in Buenos Aires and Jubilee Debt Campaign banged pots and pans outside the doors of the London office of the lead vulture fund, NML Capital.
NML Capital bought Argentine debt in 2001 cheaply when Argentina defaulted. Argentina restructured with some of their creditors but holdout creditors, led by NML, rejected the proposal and sued for the full amount. Vulture funds buy the debt of poor countries or countries in financial recovery for pennies on the dollar and then sue to make as much as a 400% profit off the backs of the poor. Jubilee USA Network introduced bipartisan legislation in previous Congresses to stop vulture funds from exploiting developing countries.
The US Government filed a friend-of-the-court brief noting a ruling against Argentina could make it much harder for countries in financial recovery or countries facing economic stresses to access credit and debt swaps. The International Monetary Fund and World Bank assert that vulture funds negatively impact debt relief and restructuring efforts in poor countries.
In June, these same vulture funds supported legislation in the New York State Senate and Assembly which would have allowed the funds to continue to litigate even after post-court judgment. Jubilee USA Network came out against the legislation by mobilizing 4,000 supporters in NY to write, e-mail and call their State Assembly and Senate Members. With American Jewish World Service, Jubilee USA put enough pressure on the New York legislative bodies to stop the legislation from coming to a vote.
In October, the vulture funds were able to convince Ghanaian courts to temporarily seize an Argentine ship. The ship was eventually returned to Argentina. Then this past November, the vulture funds made a pari passu or parity argument in the US District Court and the court ruled in favor of the vulture holdout creditors. Argentina was ordered to pay $1.3 billion on December 15, the same date they were to pay the creditors that had restructured. The federal appeals court froze the payout and heard new arguments yesterday in the 2nd U.S. Circuit Court of Appeals in New York.
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