Argentina Hires New Lawyers in Debt Battle

February 11, 2016

Move seen as symbolic push by President Mauricio Macri to end 15-year stalemate

Argentina is putting on a new face for the judge who will ultimately decide the outcome for a 15-year debt battle that has locked the country out of capital markets.

The Argentine government said Tuesday that New York-based law firm Cravath Swaine & Moore will represent Argentina before U.S. District Judge Thomas Griesa in New York.

Cleary Gottlieb, who has represented Argentina in the courtroom since 2002 in the debt battle, will still be co-counsel for Argentina, but not in front of the judge.

Insiders say the move is a push by President Mauricio Macri to convince the judge that the new government is serious about ending the stalemate.

The government has failed to settle with holdout creditors who refused to settle for 30 cents on the dollar as part of two exchange offers that stemmed from a 2001 default on more than $80 billion in bonds.

The high profile case eventually led the nation to default on those exchange bonds as well after the judge issued an injunction under a legal premise that it couldn’t pay some bondholders and not others.

Under the new government, Mr. Macri’s administration traveled to New York last week to try to settle the matter and has an offer on the table to all holdouts, some of which have agreed to the proposal.

Argentina officials have said publicly that they hope to sway the judge to lift the injunction even if not all creditors have agreed to the deal.

Argentina says Cravath was selected from eight submitted proposals, calling it the firm that will “advise the country in the final stage of this long dispute.”