The Examiners: Anders J. Maxwell on Argentina and Distressed Investo...

As Argentina finds itself on the verge of a second default, what blame, if any, does the distressed investing community hold?

Through its decision not to hear an appeal of a lower court’s findings, the U.S. Supreme Court appears to concur that Argentina’s pending default will be what it will be: a default. In the case of Argentina, if, as it’s been rumored, certain investment funds have encouraged the country’s economic advisers to press their case and ignore prior debt commitments, then the pending default may be attributable to such ill-founded advice. But to assign blame for a debtor’s default to a creditor—short of really extenuating circumstances which are not apparent here—seems akin to blaming corporate ineptitude leading to bankruptcy on the high-yield markets. Once assumed, contractual obligations are to be honored.

Anders J. Maxwell is a managing director in the restructuring & recapitalization group at New York-based investment banking advisory firm Peter J. Solomon Co.