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Nireus Aquaculture SA — named after an ancient Greek sea god — is awash in an ocean of debt and has become a parable for the bad loans crippling Greece's corporate sector, the Wall Street Journal reported today. Most of the company's big investors have fled, profits and dividends have disappeared and Nireus shares have fallen more than 70 percent in the past five years. And ever since Nireus missed bond-interest payments two years ago, the company and its creditors have been in a stalemate caused in part by Greece's bankruptcy laws, which make it almost impossible for Greek banks either to rescue the company or shut it down without the consent of its major shareholders. Aristides Belles, who owns 22 percent of the company, has refused to concede control. He is resisting a debt-for-equity swap proposal from his banks, as well as plans for a three-way merger with rivals Selonda Aquaculture SA and Dias Aquaculture SA. Both are equally steeped in debt, but a combination could result in cost savings that could help a combined company re-emerge from the crisis in a relatively strong position.

President Cristina Fernandez on Tuesday unveiled legislation that seeks to push bondholders to swap defaulted debt for new notes governed by Argentine law, a move aimed at skirting a U.S. ruling that prevented her government from paying its creditors, Reuters reported yesterday. Argentina slid into default last month after a New York court blocked an interest payment of $539 million owed to holders of debt issued under U.S. legislation that was restructured after the country's record 2002 default. The judge said Argentina could not proceed with that payment until it had also settled on repayment terms with a group of hedge funds that had rejected the restructuring deal and are demanding full payment. Fernandez has argued Argentina is not in default and has consistently labeled the adverse U.S. court rulings an attack on Argentine sovereignty. The draft bill appeared to be an attempt to bring Argentina's debt management back under its full control. A new bond swap carries legal risks, analysts said, and appeared to kill hopes that Argentina might soon reach a deal with the hedge-fund holdouts, enabling it to exit default.

A judge in Mexico ordered state oil company Petroleos Mexicanos not to cancel contracts with Oceanografia SA, the services provider that Citigroup Inc. says defrauded the bank of $400 million, Bloomberg News reported today. The Aug. 15 decision, released today on a Mexican judiciary agency’s website, requires Pemex to allow the Ciudad del Carmen-based company to continue working on existing projects. The ruling, which grants some requests from the mediator involved in the restructuring, also prevents Pemex from collecting collateral and payments under administrative proceedings against the company. The move will let Oceanografia keep a regular source of income while in bankruptcy and under the guardianship of the government, according to the ruling.

As hopes for a settlement between Argentina and holdout creditors fade, efforts by U.S. hedge fund NML Capital Ltd. to seize assets allegedly owned by an associate of Argentine President Cristina Kirchner and her husband and predecessor Néstor Kirchner are gaining traction, the Wall Street Journal reported today. Earlier this week, U.S. District Judge Cam Ferenbach in Nevada issued a ruling to help NML uncover information about a network of 123 companies based in Nevada that Argentine prosecutors allege are affiliated with Argentine construction baron Lazaro Báez, who built a business empire after Kirchner was elected president in 2003. Some analysts say the move is likely to raise tension between holdout creditors and the Argentine government, complicating efforts to reach a deal that would lift Argentina out of its recent default. U.S. Judge Thomas Griesa blocked an attempt by Argentina to pay other creditors, who accepted previous debt-restructuring offers, unless Buenos Aires also paid the holdout creditors. Credit-ratings agencies then ruled that Argentina had defaulted on its debt.

Argentina’s lowest-priced bonds are holding up the best following the country’s default last month, Bloomberg News reported yesterday. The South American nation’s notes maturing in 2038, known as Par bonds, have lost 6.5 percent to 52.88 cents on the dollar since the government was blocked from making a payment on its debt last month. That compares with a 11.6 percent plunge on its notes due in 2033 and an 8.3 percent rout on securities that mature in 2017. While the best-case scenario for investors would be for the government to reach a deal that would allow it to resume paying the bonds, the lower-priced notes would offer better returns if that effort fails and investors instead demand that Argentina immediately repay them, according to Torino Capital LLC and Bulltick Capital Markets. In that situation, called acceleration, investors would demand 100 cents on the dollar for their securities plus past-due interest.

Cash-strapped South Korean mobile-phone maker Pantech Co. filed for court receivership yesterday after its latest flagship smartphone failed to take off, the Wall Street Journal reported today. The company, in which Qualcomm Inc. and Samsung Electronics Co. are major foreign shareholders, has been relying heavily on the South Korean market to sell its phones, where rivals like Samsung and LG Electronics Inc. are dominant players. Pantech said that it filed for court receivership — equivalent to chapter 11 bankruptcy protection in the U.S. — after months of trying to restructure its debt. At the end of the first quarter, the company had 990.7 billion won ($961 million) in total debt, nearly double the amount it held in assets.

Argentina may be held in contempt of court if the country’s officials don’t stop issuing false and misleading statements about a dispute between two groups of bondholders, said the U.S. judge overseeing the case, Bloomberg News reported on Saturday. The nation’s lawyers were called into Manhattan federal court on Friday for an emergency hearing after Argentina published full-page ads in the New York Times and the Wall Street Journal the previous day challenging the court’s jurisdiction. The ads, which said that Argentina wants to keep paying its debt but has been prevented by U.S. District Judge Thomas Griesa, misled the public, the judge said. Argentina’s obligations are the same to holders of restructured debt from a 2001 default and investors who rejected the new terms, Judge Griesa said. The judge said he had warned against such false statements just a week ago.

The judge overseeing Nortel Networks Inc.’s bankruptcy said he may pressure creditors fighting over $7 billion to reach a deal in a closed-door meeting, Bloomberg News reported yesterday. Bankruptcy Judge Kevin Gross told U.S. bondholders and a monitor for Nortel’s Canadian parent in a court hearing on Friday that he wanted to meet with them for several hours and proposed an October date. Gross said that the meeting in his chambers won’t be a formal mediation session. “I am going to provide some direction and perhaps some pressure,” the judge told lawyers. The monitor for the bankrupt parent company and creditors in Canada and the U.K. have been fighting with U.S. bondholders and the bankrupt U.S. unit over how to split $7 billion in cash raised as Nortel liquidated its assets since filing bankruptcy in 2009. Judge Gross said that the meeting would be the night before a still unscheduled court fight between the bondholders and the Canadian monitor over a proposal to pay the bondholders as much as $1 billion in interest.

Argentina has asked the International Court of Justice to hear a lawsuit it wants to bring against the U.S. in a high-stakes legal battle between the South American nation and some of its creditors over unpaid debts, the Wall Street Journal reported today. Argentina's petition says that decisions by U.S. courts in the dispute have violated its sovereignty, The Hague-based tribunal said yesterday. However, the U.S. would have to accept the International Court of Justice's jurisdiction for a lawsuit to move forward, something that has happened in only 22 cases since the tribunal began working in 1946. The Obama administration is unlikely to grant the request in the absence of a bi-lateral treaty that would require the U.S. to accept the court as a venue to hear disputes with Argentina, said Paz Zarate, an international law expert at Oxford Analytica. "From the point of view of the U.S. government, the New York court system has dealt with a contractual dispute in which the executive [branch] cannot intervene. It's a dispute governed by a contract, not by a treaty or international law," Zarate said.
http://online.wsj.com/articles/argentina-sues-u-s-in-international-cour…

In related news, international banks are looking to put together a group of investors to buy disputed Argentine debt and resolve a U.S. lawsuit that is blocking the country from servicing any of its foreign bonds, Bloomberg News reported yesterday. The banks are seeking investors willing to purchase bonds left over from the nation’s 2001 default held by firms led by Elliott Management Corp., said Eduardo Eurnekian, an Argentine billionaire who has been approached by bankers. While Elliott has a court order for full repayment, a banker familiar with the talks speculated the New York-based hedge fund would accept a settlement worth about 80 cents to 85 cents on the dollar.
http://www.bloomberg.com/news/print/2014-08-07/banks-said-to-be-arrangi…

Portuguese authorities are providing 4.9 billion euros ($6.6 billion) in emergency funds to prevent the collapse of Banco Espirito Santo, one of the eurozone country’s oldest and biggest financial institutions, The Associated Press reported today. Bank of Portugal governor Carlos Costa said late Sunday that the money will come from a special fund set up during the eurozone’s recent financial crisis. The fund was created to help financial institutions in difficulty. The move came after Banco Espirito Santo’s share price lost around 75 percent of its value last week. The stock crashed after the bank reported a record half-year loss of 3.58 billion euros as previously unreported debts came to light after an audit. Shares were suspended from trading on Friday and continued to be halted Monday as authorities plan the bank’s restructuring. The scandal involving the Espirito Santo family has gripped public attention. It has also spooked international markets, which fear that the financial crisis that recently hit countries sharing the euro currency may not be over and that more financial secrets remain to be discovered. Costa said authorities were compelled to step in to prevent contagion to the rest of the Portuguese financial system.