NML Capital Ltd. (NML), a hedge fund affiliated with Paul Singer’s Elliott Management Corp. (Elliott), won two favorable rulings from the Supreme Court of the United States (the Court) on Monday, June 16, related to its, now, decade long litigation with the Republic of Argentina over the country’s 2001 default on $100 billion of its debt. The Argentinian bonds were restructured in 2005 and again in 2010, and most bondholders swapped their defaulted bonds out for new, less favorable securities.

Parent company guarantees and performance bonds are typically used in the construction and engineering industries to provide a developer with some security in the event that the contractor breaches the building or engineering contract or, in some circumstances, upon the contractor's insolvency.

In the current economic climate, contractor default is, unfortunately, even more prevalent in the construction and engineering industries, and so the issues surrounding parent company guarantees and performance bonds are very much in focus for developers.