New York Hedge Fund Awaits Decision From Ghanaian Court on Argentinean Naval Vessel

libertad New York Hedge Fund Awaits Decision From Ghanaian Court on Argentinean Naval VesselA lot of people will be watching Ghana’s Supreme Court tomorrow, which is not something that can be said everyday. Then again, it’s neither a common occurrence for a hedge fund to impound a sailing vessel used for training by a sovereign navy.

That’s what happened last week when an affiliate of Paul Singer’s hedge fund Elliott Associates asked the Ghanaian government to prevent the ARA Libertad, a tall ship owned by Argentina,from leaving the port of Tema. The cause of that bizarre action? NML Capital, the Elliott affiliate, wants the South American nation to make good on bonds issued before its $95 billion default in 2001.It’s not the first time hedge fund creditors have gone after Argentinean assets, according to Merco Press: In 2007, the country cancelled a scheduled maintenance trip to U.S. soil by the presidential airplane, and in 2009, rumors swirled that bondholders might seize the country’s exhibit at the Frankfurt book fair.

While the ship represents a small portion of the $1.6 billion in Agentinean debt held by Elliott, Bloomberg pointed out last week, the seizure may give the hedge fund leverage in negotiations. For its part, a spokesman for the Argentinean navy told Merco Press that “the vessel has not been seized, but rather detained” and that its crew of 220 sailors is keeping to its daily routine. A lawyer for Elliott affiliate NML, meanwhile, said that if Argentina pays its debt, the boat is free to leave.