The new scandal related to Argentina is expected to flare up. A group of hedge funds holding €1.3 billion ($1.71 billion) of Argentine government bonds has filed suit against the U.S. bank charged with overdue payments to the nation's bond investors, seeking to gain access to interest payments they are owed.
The suit was filed in London's court against Bank of New York Mellon Corp. The suit opens up a new front in the decade-long war between Argentina and investors including so-called holdout creditors that are seeking payment on bonds the country defaulted on in 2001.
The plaintiffs include Knighthead Master Fund LP, RGY International LLC, Capital Master Fund LP, and Quantum Partners LP.
Bank of New York's "actions have been designed consistently to protect its own interests without reference to the interests" of the bondholders, the suit alleges. Argentina defaulted last month when investors failed to receive $539 million in interest payments.
In the context, it is the second time Argentina has plunged into the market crash. 13 years ago, Argentina defaulted on its foreign debts totaling $95 billion. It was announced to be the largest foreign debt at that time.
