Hedge funds may appeal to human rights court
Friday 20 January 2012
Hedge funds with large amounts of Greek debt are reportedly planning to take the government to the European Court of Human Rights in an attempt to prevent Athens from forcing huge losses upon them.
The funds have baulked at the idea of negotiating a settlement with the indebted country. Now, in a move likely to anger millions of Greeks facing austerity measures, fund managers are considering a fight against what they believe would be a violation of human rights law, arguing that their rights to property would be infringed by a write-down of Greek debt.
With Germany and the International Monetary Fund insisting that only a deal to write off much of Greece's debt can turn around its economy, Athens has been told it needs to secure an agreement before it receives the next tranche of its €130bn bailout.
Talks between the Greek government and representatives of bondholders re-opened yesterday. With negotiations still showing little sign of progress, Prime Minister Lucas Papademos has signalled he will seek to pass a law to push through the restructuring if no voluntary agreement is reached.
But after one bondholder, Vega Asset Management, wrote to investors in December to outline the option of suing Greece, the New York Times reported that others were following suit. In the Vega letter, published by the Financial Times last month, one executive, Jesús Sáa Requejo, said: "Vega needs to start considering all available legal options to refuse and challenge any exchange that implies a [net present value] loss of more than 50 per cent."
The hedge funds' legal argument would be that the contracts they entered into when buying bonds cannot be changed retroactively. But any challenge on that basis could take years to work its way through the courts; legal challenges to the restructuring of Argentinian debt in 2002 are still being pursued now. "One of the problems with the talks is that half of the people holding Greek debt aren't at the table," said Louise Cooper, a markets analyst at BCG Partners. "Nobody is prepared to do what is required, so they keep playing these silly games."
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...