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The Landmark Court Battle over Argentina's $100 Billion Debt Restructuri
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The dramatic inside story of the most important case in the history of sovereign debt law

Unlike individuals or corporations that become insolvent, nations do not have access to bankruptcy protection from their creditors. When a country defaults on its debt, the international financial system is ill equipped to manage the crisis. Decisions by key individuals—from national leaders to those at the International Monetary Fund, from holdout creditors to judges—determine the fate of an entire national economy. A prime example is Argentina’s 2001 default on $100 billion in bonds, which stands out for its messy outcomes and outsized impact on sovereign debt markets, sovereign debt law, and IMF policy.

Default is the riveting story of Argentina’s sovereign debt drama, which reveals the obscure inner workings of sovereign debt restructuring. This detailed case study describes the intense fight over the role of the IMF in Argentina’s 2005 debt restructuring and the ensuing bitter decade of litigation with holdout creditors, demonstrating that outcomes for sovereign debt are determined by a complex interplay between financial markets, governments, the IMF, the press, and the courts.

This cautionary tale lays bare the institutional, political, and legal pressures that come into play when a country cannot repay its debts. It offers a deeper understanding of how global financial capitalism functions for those who work in or study debt markets, international finance, international relations, and international law.

Gregory Makoff, PhD, is a senior fellow at the Centre for International Governance Innovation and an expert on sovereign debt management. A former banker specializing in debt advice, liability management, and derivatives, he has also advised the US Department of the Treasury.


1 Argentina Defaults Then Fights with the IMF (December 2001–March 2003)
2 The Three-Way War: Argentina Battles with Creditors and the IMF over the Debt Deal (January 2003–April 2004)
3 Kirchners Triumph: Argentinas 2005 Debt Restructuring (April 2004–June 2005)
4 Backstory: Elliots War on Peru (1996–2000)
5 Raid on the Argentine Central Bank (December 2005–January 2007)
6 All Plaintiffs Big and Small (June 2005–December 2009)
7 Turning Point (2010)
8 Equal Treatment (October 2010–May 2014)
9 Argentinas Economic Stumbles and Elliotts Worldwide War (October 2010–June 2014)
10 It All Falls Apart (June 2014–November 2015)
11 The Settlement (December 2015–April 2016)

Appendix A: Featured Characters
Appendix B: Timeline of Events
Note on Sources
About the Author

"Gregory Makoffs compelling case study of what happens when law and geopolitics collide has the complexity and richness of a great Russian novel. By transmuting a court case about pari passu into an engrossing page-turner, he has created a triumphant synthesis of the most venomous topic in international finance."—Felix Salmon, chief financial correspondent, Axios, and author of The Phoenix Economy: Work, Life, and Money in the New Not Normal

"A spectacular account of sovereign debts case of the century. Any investor in emerging markets debt should read this story, as should any government thinking of issuing—or restructuring—an international bond."—Brad Setser, senior fellow, Council on Foreign Relations

"The battle royale between Argentina and its creditors is much more than dry finance. Makoff brings alive the humans behind sovereign debt standoffs—their skill, frailties, and above all, their will to win at seemingly all costs."—Sujeet Indap, Wall Street editor, Financial Times, and coauthor, with Max Frumes, of The Caesars Palace Coup: How a Billionaire Brawl Over the Famous Casino Exposed the Power and Greed of Wall Street

"Default is a fascinating and valuable examination of one of the most consequential events in international finance in our lifetimes—the Argentine debt default. Gregory Makoffs absorbing account of this episode is the most comprehensive available, especially in its detailed account of the intense human characters behind the complex litigation that resulted."—Randal Quarles, former vice chair of the Federal Reserve and former under secretary of the US Treasury

"Default gives readers a rare view into the economic, legal, political, and social challenges of resolving a sovereign default. While focused on the holdout litigation against Argentina, Default also explains how the countrys post-2001 difficulties were exacerbated by its highly politicized approach to debt and its creditors, as well as the lack of political consensus for addressing interrelated issues across the center and provinces."—Anoop Singh, former director, Western Hemisphere Department, International Monetary Fund

"The fight between Argentina and its bondholders is one of the most significant episodes in the history of sovereign debt litigation, and Greg Makoff has written the definitive treatment."—W. Mark C. Weidemaier, Ralph M. Stockton Jr. Distinguished Professor, University of North Carolina School of Law at Chapel Hill

"An extraordinary book—it combines technical details and human interactions to produce a thrilling narrative of the legal proceedings of a sovereign debt default case that changed the way such cases are treated."—Manuel Hinds, former finance minister of El Salvador and coauthor, with Benn Steil, of Money, Markets, and Sovereignty,

"While there is a substantial body of legal literature on Judge Thomas P. Griesa’s 2012 decision to impose the pari passu injunction on Argentina, Gregory Makoff’s Default is the first book that fully explains why he did it. Makoff achieves this by detailing all the events that, in a dramatic climax, led up to the decision, including Judge Griesa’s building anger at Argentina. It’s a surprising and fascinating story that should make it a fun read for legal scholars and general readers alike."—Annamaria Viterbo, professor of international law, University of Turin, Italy

"Makoff deftly traces the dynamics of the long-running struggle between the government of Argentina and its creditors. His meticulously researched narrative reveals political as well as legal struggles, involving the IMF and its member governments; retail investors in Germany, Italy, and Japan; holdout creditors in the United States; and Argentina’s political elites. Default reminds us why creating better mechanisms for addressing sovereign debt crises is both so important and so difficult to achieve. This book will be of interest to anyone—political scientists, economists, historians, and finance professionals, among others—interested in gaining a deeper understanding of sovereign debt dynamics."—Layna Mosley, professor of politics and international affairs, Princeton University

"[A] superb account."—David Skeel, Wall Street Journal

"Default is a powerful, exciting and instructive book that clearly and surprisingly amusingly presents the lengthiest, messiest sovereign debt restructuring in history (283)."—ReVista Harvard Review of Latin America

"This book is a pleasant surprise."—CHOICE connect

"A scrupulously fair and comprehensive look at the trial of the century for sovereign debt."—Robin Wigglesworth, Financial Times

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