Hedge fund NML Capital has launched a lawsuit against SpaceX to seize control of two launch contracts between the US-based launch service provider and the Argentinian government.
NML, a unit of billionaire Paul Singer’s Elliot Management Corp, has…
Hedge fund NML Capital has launched a lawsuit against SpaceX to seize control of two launch contracts between the US-based launch service provider and the Argentinian government.
NML, a unit of billionaire Paul Singer’s Elliot Management Corp, has been in a long-running legal battle with Argentina ever since the South American country defaulted on almost US$100bn of debt in 2001.
NML owned a portion of that debt and, instead of accepting swaps worth around 30 cents on the dollar as 93% of the other creditors did, the hedge fund joined a group of holdout investors that went to court with the country to recover the debt.
In 2012, the 2nd US Circuit Court of Appeals in New York ruled in favour of the funds, awarding them US$1.33bn plus interest. Argentina appealed but this was rejected in 2013.
However, the state has so far refused to pay these holdout creditors and this has led to the hedge funds attempting to seize control of Argentinian assets to recoup the money.
According to the complaint against SpaceX, the contracts between the Argentinian space agency CONAE (Comisión Nacional de Actividades Espaciales) and the launch services provider are commercial property and therefore not protected under sovereign immunity laws.
Robert Cohen of Dechert, NML’s lawyer, argued: “Given that Argentina has systematically refused to pay its judgments, obey US court orders, or even talk to its creditors, this effort to enforce judgments against Argentina is right and necessary, and we look forward to presenting our case.
“Argentina’s contract for SpaceX launch slots clearly constitutes property used for a commercial activity, which means a creditor, like my client NML, can seize it under the applicable law.”
The case (14-02262) is with the US District Court, Central District of California (Los Angeles).
SpaceX signed the contract for two launches with CONAE in April 2009. The US company agreed to launch two Earth observation satellites, SAOCOM 1A and 1B, on Falcon 9 rockets. The first of the flights is scheduled for mid-2015 with the second likely to take place the following year.
