Argentina strikes settlement with holdout funds over 2001 defaulted debt

The Argentine government submitted a letter to Judge Loretta Preska of the Southern District of New York announcing a settlement in principle with funds that held sovereign debt in default since the 2001 crisis. A series of funds, known as holdouts, had purchased defaulted debt, intending to sue the country. They did not accept the restructurings offered in 2005 (under Néstor Kirchner’s presidency), 2010 (Cristina Kirchner), or 2016 (Mauricio Macri). The funds that still hold defaulted debt are Attestor Master Value, Bainbridge Fund, Bison Bee LLC, Bybrook Capital Master, Trinity Investments, and White Hawthorne. “After many years of litigation, our clients have reached a settlement in principle with the Republic of Argentina to resolve the outstanding debt claims,” said Dennis Hranitzky, Partner and Head of Quinn Emanuel’s Sovereign Litigation, which represents Attestor Master Value and Trinity Investments. In a statement, Hranitzky said that “the parties have agreed to a standstill of the pending proceedings while the settlement progresses toward closing.” However, details on the agreement’s timetable have yet to be disclosed. Hranitzky became a household name in Argentina in 2012, when he confiscated the Fragata Libertad, an Argentine frigate in Ghana, while advising the NML-Elliott Capital Management fund. “Our clients remain committed to bringing this matter to a fair and final resolution,” he added. The clients he represents, the Herald could learn, were originally claiming US$450 million and, so far, they “recovered” US$200 million, meaning US$250 are still in dispute. Holdouts are estimated to represent less than 3% of the original holders of defaulted debt. Last year, Preska ordered the seizure of US$210 million that Argentina had in a U.S. bank account in the so-called Brady bonds. She also ordered to freeze an additional US$100 million connected to a dispute over defaulted bonds. Sebastian Marill, Regional Director of LATAM Advisors and an expert in Argentina’s international litigations, said that first, holdout creditors Attestor Master Value and Bainbridge Fund reached an agreement between themselves to divide, under undisclosed terms, the collateral of the seized Brady bonds. Then, Argentina announced that they settled with both judgment creditors, who then requested Preska to suspend the litigation, including putting on hold a request they filed in 2025, seeking the surrender of the country’s stake in the Banco de la Nación Argentina bank and Aerolíneas Argentinas airlines, until the settlement agreement is finalized. Argentina’s Treasury Prosecution Office, which leads the country’s legal strategy in international courts, chose not to comment.