NEW YORK Argentina has reached a deal with lawyers pursuing a U.S. class action lawsuit over defaulted debt to resolve the case, as part of the country's efforts to settle long-running litigation over its 2002 default, a court-appointed mediator said Tuesday.
Daniel Pollack, a New York lawyer overseeing the settlement talks, said the agreement in principle "fit within the numerics" of Argentina's proposed offer earlier this month to resolve various lawsuits by holders of defaulted bonds.
Exactly how many bondholders are covered by the class action settlement would be known in several weeks, Pollack said. Those who do participate would receive 100 percent of the principal owed and 50 percent of the interest on that principal, he said.
Pollack said the deal was conditioned on the approval of the Argentine Congress and the lifting of injunctions issued by U.S. District Judge Thomas Griesa in the litigation. He added that he was "hopeful that there will be more settlements to come."
Jason Zweig, a lawyer for the plaintiffs, said he was pleased Argentina had "decided to put this matter behind them."
"This shows that the proposal is good and that we are continuing to advance positively. We hope that there will be more agreements in the coming days," said a source in the Argentine finance ministry.
The deal came after Argentina, headed by President Mauricio Macri, on Feb. 5 proposed paying $6.5 billion to settle litigation stemming from its record $100 billion default in 2002.
Two out of six leading bondholders pursuing have already accepted the offer, Pollack has said. The offer represents a 27.5 percent to 30 percent discount for creditors who filed claims of about $9 billion.
But Elliott Management's NML Capital Ltd and Aurelius Capital Management LP, among the leading creditors pursuing individual lawsuits in the dispute, have not accepted the offer.
Those creditors spurned Argentina's 2005 and 2010 debt restructurings, which resulted in 92 percent of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.
The class action lawsuit in Tuesday's accord was one of several by boldholders who sought to pursue claims as a group.
Plaintiffs led by Henry Brecher, one of the bondholders, until recently sought $68 million. But a U.S. appeals court in September dealt the plaintiffs a setback by throwing out a ruling that had expanded the class action.
As a result, the plaintiffs were expected at a hearing in April to present a revised model in which the damages that could be sought would have been limited to only investors who held the bonds for a continuous defined period.
(Reporting by Nate Raymond in New York; Additional reporting by Walter Bianchi in Buenos Aires; Editing by Bernard Orr)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Feb 17, 2016 06:15 AM