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Lawyers for James Merrill, the president and co-owner of TelexFree who is under house arrest awaiting trial on fraud charges, are requesting the release of more than $4 million from frozen bank accounts to fund his legal defense, Dow Jones Daily Bankruptcy Review reported today. Merrill and his partner, who authorities say fled to Brazil, stand accused of running a massive pyramid scheme and face criminal wire-fraud charges in Massachusetts, where their now-bankrupt company is based. In papers filed Tuesday with the U.S. District Court in Worcester, Mass., defense attorneys said that based on the magnitude of the alleged crime, the release of about $4.2 million held in four bank accounts is essential to Merrill's ability to fully defend himself.

An investment group that owns a piece of a major telecom firm in the Republic of Georgia filed for bankruptcy in a U.S. court on Monday, facing a deadline to pay more than $11 million to noteholders, Dow Jones Daily Bankruptcy Review reported today. MIG LLC, which operates as Metromedia International Group Inc., filed for chapter 11 protection in Wilmington, Del., blaming a dispute that stopped the flow of profits from its only major investment: a 46 percent stake in the ownership group that owns telephone provider Magticom Ltd.

Argentina said Monday night that it will send a delegation to meet with a court-appointed lawyer on July 7 as it tries to resolve a dispute with a small group of creditors that could see the South American country default for a second time in 13 years, the Wall Street Journal reported today. Argentina's long-running battle with hedge funds in U.S. courts entered a critical phase after U.S. District Judge Thomas Griesa on June 27 blocked the country from making $539 million in interest payments that were due on some of its bonds Monday. Argentina will likely default if it can't get that money to bondholders before a 30-day grace period expires in July. The judge has ruled that Argentina must pay the hedge funds that are suing to collect on defaulted bonds at the same time it pays investors who own bonds the country issued after its 2001 default. (Subscription required.)
http://online.wsj.com/articles/argentina-holdouts-have-yet-to-reach-agr…

To learn more about the next steps for Argentina and sovereign debt restructuring, be sure to watch James Millstein’s June 20 presentation, which he made at ABI’s Cross-Border Symposium: http://news.abi.org/videos

A pair of Wall Street investment firms is challenging Puerto Rico's new law allowing some public agencies to restructure their debt, saying that it violates the U.S. Constitution, the Wall Street Journal reported today. Funds managed by Franklin Templeton Investments and OppenheimerFunds Inc. asked the U.S. District Court for the District of Puerto Rico to block the law, arguing that only Congress is allowed to create bankruptcy rules. The funds hold about $1.7 billion combined in debt from the Puerto Rico Electric Power Authority, which they say they believe will seek to restructure its debt under the act "imminently." Puerto Rico lawmakers last week approved legislation allowing some agencies such as the island's power, water and transportation authorities to restructure their debt. Those agencies have a combined $19.4 billion in bonds outstanding, according to estimates from Barclays PLC. The law doesn't apply to Puerto Rico's general-obligation or sales-tax bonds, which are backed by the island's taxing authority.

Argentina is poised to miss a bond payment today, putting the country on the brink of its second default in 13 years, after a U.S. court blocked the cash from being distributed until the government settles with creditors from the previous debt debacle, Bloomberg News reported yesterday. The nation has a 30-day grace period after missing the $539 million debt payment to seek an accord with a group of defaulted bondholders led by billionaire Paul Singer’s NML Capital Ltd. and to prevent a default on its $28.7 billion of performing global dollar bonds. Both Argentina and NML have said that they’re open to talks. A decade-long battle between Argentina and holdout creditors from the country’s $95 billion default in 2001 is coming to a head. The U.S. Supreme Court on June 16 left intact a ruling requiring the country to pay about $1.5 billion to holders of defaulted debt at the same time it makes payments on restructured bonds. Argentina last week transferred funds to its bond trustee to pay the restructured notes, only to have U.S. District Court Judge Thomas Griesa order the payment sent back while the parties negotiate.
http://www.bloomberg.com/news/print/2014-06-29/argentina-at-brink-of-de…

To learn more about the next steps for Argentina and sovereign debt restructuring, be sure to watch James Millstein’s June 20 presentation, which he made at ABI’s Cross-Border Symposium: http://news.abi.org/videos

Argentina lost a last-ditch bid to delay payments to Paul Singer’s NML Capital Ltd. and other holders of its defaulted bonds, adding to pressure on the South American country to negotiate a deal with the holdouts, Bloomberg News reported yesterday. U.S. District Judge Thomas Griesa had ordered Argentina to pay $1.5 billion to the holders of defaulted debt when it makes the next payment on its restructured debt, due June 30. Judge Griesa yesterday denied Argentina’s request for a stay, which it claims is necessary to allow it to negotiate a resolution with the bondholders. Argentina defaulted on $95 billion of debt in 2001. About 92 percent of creditors agreed to swap the defaulted debt for new bonds in 2005 and 2010, while the rest refused to accept losses of about 70 percent. Argentina has threatened a new default if it’s forced to obey Judge Griesa’s orders, saying that it can’t afford to pay holders of its defaulted and performing debt. Griesa’s decision leaves Argentina with the choice of defying his court orders, defaulting on the debt or striking a deal with the holdouts. If Argentina fails to make the $900 million payment due June 30 to holders of its restructured debt, it has an additional 30-day grace period.
http://www.bloomberg.com/news/print/2014-06-26/argentina-bond-fight-jud…

To learn more about the next steps for Argentina and sovereign debt restructuring, be sure to watch James Millstein’s June 20 presentation at ABI’s Cross-Border Symposium: http://news.abi.org/videos

Distressed debt funds are raising cash to seek greater opportunities in China, where Standard & Poor’s says corporate borrowing topped the U.S. last year, Bloomberg News reported yesterday. Planned commitments to funds investing in Chinese and other Asian troubled assets are set to surpass $2 billion this year, up from $303 million in 2013, data from researcher Preqin Ltd. show. Morningside Group Holdings Ltd. in Hong Kong plans a $103 million vehicle, Preqin said. Guangzhou-based Shoreline Capital Management Ltd. is seeking $500 million for its third distressed-debt fund, according to co-founder Ben Fanger. China’s economic growth has slowed to the least in more than a decade even as companies increased debt to $14.2 trillion as of Dec. 31, surpassing the $13.1 trillion in the U.S., according to a June 15 S&P report. Non-performing loans jumped the most since 2005 in the first quarter and state-owned asset management companies are raising funds to help clean up lenders’ balance sheets.

Argentine officials will seek next week to negotiate for the first time with hedge funds that refused to take part in its debt restructuring, a lawyer for the country said in Manhattan federal court yesterday, potentially bringing the country closer to resolving a years-long legal battle, Reuters reported yesterday. "I've been informed by Argentina that the authorities will be in New York next week and want to negotiate with the holdouts," said Carmine Boccuzzi of Cleary Gottlieb Steen & Hamilton at a hearing before U.S. District Judge Thomas Griesa in Manhattan. Griesa had ordered Argentina to pay the holdout funds $1.33 billion at the same time it pays bondholders who participated in the 2005 and 2010 restructurings of Argentina's $100 billion of bonds. The restructured bond holders are due a payment on June 30. If the payment isn't made, Argentina would enter a technical default on the restructured debt.

http://www.reuters.com/article/2014/06/18/us-argentina-debt-idUSKBN0ET1…

For more on the Argentinian debt crisis, the Supreme Court's ruling and what happens next, make sure to attend Friday's Cross-Border Symposium on Friday in New York. The program will feature a keynote by James Millstein, who will discuss Argentina's debt situation. Millstein, chairman and CEO of Millstein & Co., represented the Republic of Argentina in connection with the exchange offer for its international bond indebtedness.
http://www.abiworld.org/CB14/

Argentina will seek to move its overseas bonds into local jurisdiction to skirt a U.S. court ruling forcing it to pay holders of defaulted debt in full, Bloomberg News reported yesterday. The swap will ensure holders of restructured bonds keep getting paid while allowing Argentina to avoid complying with the U.S. ruling, Economy Minister Axel Kicillof said yesterday. Cabinet officials will meet with lawmakers today to discuss how to shift investors into local-law bonds, he said. Officials overseeing South America’s second-largest economy say that the nation doesn’t have sufficient reserves to pay what they estimate could be $15 billion of claims from holders of defaulted bonds that didn’t participate in two debt exchanges following the country’s 2001 default. After the U.S. Supreme Court said on June 16 that it wouldn’t consider the case, Argentina is bound by a U.S. District Court ruling that it can’t make interest payments to holders of restructured international bonds without paying the defaulted notes as well.

For more on the Argentinian debt crisis, the Supreme Court's ruling and what happens next, make sure to attend Friday's Cross-Border Symposium on Friday in New York. The program will feature a keynote by James Millstein, who will discuss Argentina's debt situation. Millstein, chairman and CEO of Millstein & Co., represented the Republic of Argentina in connection with the exchange offer for its international bond indebtedness.
http://www.abiworld.org/CB14/

The failed Tokyo-based bitcoin exchange, Mt. Gox, received court approval yesterday to begin chapter 15 proceedings in the U.S. as it awaits approval of a settlement with U.S. customers and a sale of its business, Reuters reported yesterday. Mt. Gox was once the world's leading exchange for trading the digital currency, but shut its website earlier this year after saying that it lost some 850,000 bitcoins — worth more than $500 million at current prices — in a hacking attack. It subsequently said it found 200,000 bitcoins. The company filed for chapter 15 protection in March to prevent U.S. customers who had filed a class action lawsuit from seizing its U.S. assets, such as computer servers, and demanding evidence and access to Mt. Gox executives. Since then, the company and the class action plaintiffs reached a settlement, which is awaiting final approval by a federal court in Chicago. Bankruptcy Judge Stacey Jernigan granted recognition of the chapter 15 case, which allows Mt. Gox's foreign representative to file lawsuits and pursue potential funds to repay creditors.