United States

Bank of New York Mellon Corp. must return a $539 million deposit from Argentina intended for restructured bondholders, a U.S. judge ruled, calling the transfer an “explosive action” that disrupted potential settlement talks with holders of defaulted debt, Bloomberg News reported. U.S. District Judge Thomas Griesa in New York has ruled that Argentina can’t pay holders of its restructured debt without also paying more than $1.5 billion to a group of defaulted bondholders, raising the possibility of a new default as the South American nation approaches a June 30 payment deadline.

Governments have a long history of borrowing abroad and not repaying their debts. The first recorded sovereign default was in the 4th century BC when ten Greek cities failed to honour loans from the temple of Delos. Yet there are still no clear rules governing what happens when sovereigns do not pay up, The Economist reported. The murkiness was highlighted this week when Argentina seemed to offer, under duress, to negotiate with the 8% of its bondholders who refused to accept any losses after a huge default in 2001.

Argentina is being pushed toward a new default after a U.S. Supreme Court decision favored holdout creditors seeking payment on bonds it defaulted on in 2001-2002, Economy Minister Axel Kicillof warned United Nations diplomats on Wednesday, Reuters reported. Referring to those creditors as "vulture funds," Kicillof said the June 16 decision by the top U.S. court to deny Argentina the chance to appeal a lower court ruling means it faces an insurmountable payment to all existing bondholders, given it has just $28.5 billion in foreign currency reserves.

A federal appeals court in Chicago said auditor Grant Thornton LLP must again face a lawsuit over its alleged role in the collapse of Italian dairy company Parmalat SpA, while lamenting that its decision puts the nearly 10-year-old case on the brink of starting anew, Reuters reported. Wednesday's decision by the 7th U.S. Circuit Court of Appeals overturned an April 2013 dismissal of the case by U.S. District Judge John Darrah in Chicago. The appeals court ordered that the case be moved to a state court in Cook County, which includes Chicago, where Grant Thornton is based.

The court-appointed official overseeing the US bankruptcy of Seán Dunne has asked an American court for permission to examine, in private, documents from Irish and Swiss family law proceedings in which the developer is involved, the Irish Times reported. Bankruptcy trustee Richard Coan has also asked to question the Co Carlow developer (59), now living in the US, on the records at a private hearing if required.

Mt. Gox Co., once the world’s largest bitcoin exchange, won approval of its U.S. bankruptcy filing, giving a boost to a Japanese investigation into the disappearance of 650,000 units of the digital currency, Bloomberg Businessweek reported. U.S. Bankruptcy Judge Stacey G. Jernigan said today in Dallas she has “ample legal authority” to accept the U.S. filing and recognize Mt. Gox’s Japanese bankruptcy as the foreign main proceeding. The ruling empowers the company’s Japanese trustee to examine witnesses, gather and review evidence, and oversee assets in the U.S., such as servers.

The U.S. Supreme Court handed Argentina a major setback in its long-running battle with a small group of determined creditors, heightening the risk the country will default for the second time in 13 years, The Wall Street Journal reported. The justices on Monday rejected Argentina's appeal of a lower-court ruling that said the country can't make bond payments until it compensates hedge funds that refused to accept restructured debt in the years following Argentina's 2001 default.

Veris Gold Corp., which owns Jerritt Canyon, filed for bankruptcy protection Monday in the U.S. and Canada after the Deutsche Bank AG, London Branch claimed the company was in default, the Elko Daily Free Press reported. These filings also follow Veris Gold laying off nearly 60 people at the Jerritt Canyon complex last week. Veris Gold said the Supreme Court of British Columbia issued an order Monday granting “the company’s application for creditor protection under the Companies’ Creditors Arrangement Act.” Veris Gold has its headquarters in Vancouver.

Bitcoin company CoinLab Inc. has thrown its support behind Japanese bitcoin exchange Mt. Gox's U.S. bankruptcy case, a change of course for CoinLab, which has sued Mt. Gox for $75 million, The Wall Street Journal reported. Lawyers for CoinLab said in court papers Friday that they wouldn't object to Mt. Gox's formal request for U.S. bankruptcy protection, despite earlier hints that they might challenge that request. Court documents offered no explanation for CoinLab's decision. Japanese insolvency expert Nobuaki Kobayashi, who is leading Mt.

The court-appointed trustee overseeing the US bankruptcy of property developer Sean Dunne intends to ask the American court’s permission to seek access to family law documents in Ireland, the Irish Times reported. Timothy Miltenberger, lawyer for Mr Dunne’s trustee Rich Coan, told the Connecticut bankruptcy court yesterday that he intended to apply under US bankruptcy law to obtain information about the Co Carlow developer’s finances under confidentiality conditions.