Yes, Vulture Funds are still Legal. Stop Them Now!!!!

Dear Kevin,



This Wednesday, two holdout vulture funds, including Paul Singer’s NML Capital, are in a New York Federal court verses ArgentinaBecause this proceeding will have vast international repercussions, the Financial Times has dubbed the hearing “‘the trial of the century’ in sovereign debt restructuring.” The US Government filed a friend-of-the-court brief noting a ruling against Argentina could make it much harder for countries in financial recovery or countries facing economic stresses to access credit and debt swaps.

The faith community and other groups, organized by Jubilee USA, will vigil out of concern for poor people affected by vulture funds during the proceeding outside the Federal 2nd Circuit Court of Appeals Wednesday, February 27th starting at 1:00 PM in New York City.  Vigils will also take place in London and Buenos Aires.  Please forward our press release to reporters and sign up to receive my very first “tweet” from the courtroom on Twitter at @Eric_LeCompte.

If these hedge funds win – it will mean they will more aggressively target poor countries in fragile financial recovery. IF WE WIN, it will mean that it will be harder for vulture funds to target the monies that develop social infrastructure in many poor countries. No matter what, it seems that this case is likely to go all the way to the Supreme Court.

Vulture funds buy the debt of poor countries or countries in financial recovery for pennies on the dollar and then sue to make as much as a 400% profit off the backs of the poor. Jubilee USA Network introduced true bipartisan legislation in previous Congresses to stop vulture funds from exploiting poor countries.  The International Monetary Fund and World Bank believe this kind of behavior threatens financial recovery in fragile economies.  

In 2001, when Argentina defaulted on roughly $81 billion, NML Capital purchased some of Argentina’s debt on a secondary market. When Argentina defaulted, they restructured with some of their creditors in 2005 and 2010 but holdout creditors, led by NML Capital, rejected the proposal and sued Argentina for the full amount in NY courts – thus, naming NML Capital a holdout vulture fund.  Vulture funds hurt both legitimate investors and poor people.  That’s why the US government got involved in this case and that’s why the IMF and World Bank are against vulture funds.

In June, these same vulture funds supported legislation in the New York State Senate and Assembly which would have allowed the funds to continue to litigate even after post-court judgment.  Jubilee USA Network came out against the legislation by mobilizing 4,000 supporters in NY to write, e-mail and call their State Assembly and Senate Members. With American Jewish World Service, Jubilee USA put enough pressure on the New York legislative bodies to stop the legislation from coming to a vote.

In October, the vulture funds were able to convince Ghanaian Courts to temporarily seize an Argentine ship. The ship was eventually returned to Argentina. Then this past November, the vulture funds made a pari passu or parity argument in the US District Court and the court ruled in favor of the vulture holdout creditors. Argentina was ordered to pay $1.3 billion on December 15, the same date they were to pay the creditors that had restructured. Now, the federal appeals court has frozen the payout to hear new arguments on the case in the 2nd U.S. Circuit Court of Appeals in New York on February 27. 

If you are in New York City, please join me at the vigil.  Don’t forget to sign up for my first tweets at @Eric_LeCompte to get as-it-happens updates on Wednesday.

In Solidarity,


Eric LeCompte
Executive Director

P.S. If you are in NY please join us on Wednesday, February 27th from 1:00 – 3:00pm at the Court of Appeals 2nd Circuit, 40 Foley Sq, New York, NY 10007-1502.  Let us know if you can join by sending an email to Rickard at  Also, bring your friends and signs.     


About eslkevin

I am a peace educator who has taken time to teach and work in countries such as the USA, Germany, Japan, Nicaragua, Mexico, the UAE, Kuwait, Oman over the past 4 decades.
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