A judge says American hedge funds that bought Argentine debt must be repaid, to the tune of $1.3 billion. Argentina has so far refused.
The issue dates back to 2001, when the government of Argentina defaulted on its debt. At the time, it negotiated a deal with its creditors to pay them back 30 cents on the dollar. Most creditors agreed to the plan -- other than a few large U.S. hedge funds.
Over the years, these hedge funds have continued to demand everything they think they are owed. Buenos Aires has continued to refuse, calling them "capitalist vultures."
The case has gone through a number of courts. A judge ruled last Wednesday that the Argentinian government does have to pay and threatened to force the U.S. bank intermediaries to comply.
The deadline to pay up is set for December 15th, under the ruling. But the story isn't over yet -- the case could go up the ladder to the U.S. Supreme Court.
"The stated position is not paying at all," said Daniel Marks, Argentina's former undersecretary of finance. "I think there is a middle ground that is well-known and accepted bankruptcy rules around the world."
That middle ground, as he puts it, would have U.S. hedge fund lenders take the 30 cents on the dollars everyone else did.