Argentina received a Thanksgiving surprise from U.S. Judge Thomas Griesa, who ruled last week that the Buenos Aires government must pay $1.3 billion to holders of defaulted debt. The decision has infuriated the government of Argentine President Cristina Fernandez, members of which likened the judge to a vulture and called his ruling a form of "legal colonialism."
More than just Argentine pride rides on the appeal, however: Mr. Griesa's decision has potentially sweeping implications for debt restructuring and could damage the United States' status as a center for future deals.
In 2001, Argentina defaulted on $95 billion of debt. It subsequently commenced negotiations with creditors and reached agreement with 93 percent of bondholders to restructure its debt in 2005 and 2010 and to make repayment of 30 cents on the dollar over 30 years.