A federal judge in New York denied a request by two U.S. investment firms for a temporary restraining order blocking Ecuador’s plan to restructure $17.4 billion in sovereign debt.
Ecuador had argued that a significant delay could lead to a “massive, cascading default” for the South American nation. U.S. District Judge Valerie Caproni in Manhattan on Friday denied the motion by two U.S. investment firms opposed to the debt-swap plan. Boston-based GMO, and Contrarian Capital Management LLC, a Greenwich, Connecticut hedge fund had called its offer to investors of 91 cents on the dollar “coercive in the extreme.”
Caproni disagreed with the funds’ contention that Ecuador lied when it denied, in a press release, that its offer to investors was “coercive.” The judge said, “no one is being compelled or forced to comply with the tender offer.”
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