Behind The Scenes, Negotiations Between Argentina And Hedge Funds Are Going As Badly As You Can Imagine

After the Supreme Court upheld a lower Court's ruling that Argentina must pay a group of hedge funds over $1.3 billion worth of bonds, it seemed the Republic was finally done fighting.

But c'mon - after over a decade of Court battles, tons of heated political rhetoric, and the fact that President Fernandez was forced to fly private to avoid getting her jet impounded - did you really think Argentina was just going to roll over?

"Argentina's professed willingness to negotiate with its creditors has proven to be just another broken promise," said Jay Newman, senior portfolio manager at Elliott Management. "NML is at the table, ready to talk, but Argentina has refused to negotiate any aspect of this dispute. There are no negotiations underway, there have been no negotiations, and Argentina refuses to commit to negotiations in the future. Argentina's government has chosen to put the country on the brink of default. We sincerely hope it reconsiders this dead-end path."

Doesn't sound like it at this point, though. One of President Fernandez's deputies, Carlos Kunkel, told the Argentine press that he was convinced that Judge Griesa - the man who handed down the ruling that the country must pay - is forcing negotiations because he'll get a cut of the payout.

Classy.

In case you missed last week's lack of action, Judge Griesa appointed a Special Master to facilitate negotiations, and Argentina vacillated between whether or not they would show up to the table (they don't have to, legally).

Meanwhile, the Republic also tried to do exactly what it's not supposed to do according to Judge Griesa's ruling, and attempted pay bondholders who restructured the same debt that NML holds. If some parties get paid, everyone has to be paid, and at this point that all still has to happen by July 30th.

Argentina tried to get a stay placed on that payment during these "negotiations" but that got thrown out last week as well.

Based on Argentina's action, and transcripts of negotiations discussions reviewed by Business Insider, it's not hard to see why the Judge might be getting frustrated. Usually he's on vacation at his family ranch this time of year (something attorneys present at the negotiations apologized for).

In the transcript, Judge Griesa acknowledged Argentina's greatest fear - that other parties that hold the same bonds NML does will try to get a full 100 cent on the dollar payout too. He ended the meeting by saying he wouldn't sign any orders to pay them for the time being, but that could change.

With that calamity staring it in the face, Argentina has called a special meeting of the Organization of American States. The Fernandez administration knows that time is running out, and they'll likely try to use the body to put pressure on Judge Griesa to sign an order to stay payment until "negotiations" are finished.

The negotiations would probably have to start first, though.