A U.S. judge ordered Argentina and investors who did not participate in the country's past debt restructurings to meet "continuously" with a court-appointed mediator until a settlement is reached, warning of the threat of a new default.
U.S. District Judge Thomas Griesa in New York told Argentina and lawyers for investors who declined to restructure their bonds after the country defaulted on about $100 billion in 2002 that time was running out to reach a deal and avert a fresh default.
"That is about the worst thing I can envision. I don't want that to happen," the judge said.
Jonathan Blackman, a lawyer for Argentina, Latin America's No. 3 economy, said even with around-the-clock talks, it would be "unlikely, if not impossible, to result in settlement."
"It simply can't be done by the end of the month," he said.
Griesa ordered the parties to meet with Daniel Pollack, a New York lawyer appointed to oversee settlement talks, "continuously until a settlement is reached." Pollack scheduled a meeting Wednesday at 10 a.m. EDT (1400 GMT).
Pollack, who was appointed June 23 as a mediator, has been holding meetings with the parties, publicly acknowledging talking twice with Argentine officials.
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Argentina is sending a delegation to meet with Pollack, but a government source said Economy Minister Axel Kicillof would not be among the group.
The presidency of Argentina said in a statement that "Judge Griesa ... resolved absolutely nothing on any of the issues which had been brought before him."
A lead holdout creditor, Elliott Management's NML Capital Ltd, said in a statement it was prepared to meet with Pollack to resolve the dispute.
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"We are confident this matter could be resolved quickly if Argentina would join us in settlement discussions," NML said.
Argentine over-the-counter dollar-denominated bonds slid following the hearing, before recovering some of the losses. The bid price on the Discount bond was down 1.1 percent on a day earlier at $86.65 at 1725 local time (2025 GMT) while the Par bond was 0.8 percent lower at $50.80.