Argentina has accused the American judge who described the country's latest attempt to bypass holdout funds as "illegal" of acting like an "imperialist".
Argentina's cabinet minister Jorge Capitanich blasted veteran judge Thomas Griesa for his "unfortunate" choice of words and described his remarks as "incorrect" and "imperialist".
Yesterday, judge Griesa said Argentina's attempt to avoid paying the so-called vulture funds by offering a bond swap that would allow holders of restructured debt to be paid in Argentina is "invalid, illegal and in violation of current court orders and injunctions".
However, the judge refused to hold the country in contempt as requested by the legal teams representing the holdouts funds.
Earlier this week, Buenos Aires introduced plans to circumvent his court ruling by making interest payments to bondholders who took a haircut on the country's debt following its 2001 default through Argentina's central bank rather than the US banks subject to his orders.
Argentina has said it is willing and able to pay those creditors who have agreed to a restructuring. However, judge Griesa has blocked the country from making interest payments to the majority of bondholders unless it first pays out in full to the hedge funds – including Paul Singer’s Elliott Management and Aurelius Capital Management - which Argentina refuses.