Sunday, October 7, 2012

Hedge fund naval attack!

The Argentinian naval vessel, ARA Libertad, was seized while it was docked in Ghana with what is said to be 200 sailors on board.  Other reports stated 220 men, and 110 women and children, which is possible as the ship was going to be in a race, and it was a little bit of a holiday-style voyage.

A Hedge Fund has Physically Taken Control of a Ship Belonging to  Argentina's Navy
Joe Weisenthal, Business Insider, 4 October 2012 (hat tip: NC)
Why? Because Argentina is in a long legal battle with the hedge fund Elliott Capital Management, which has been trying for years and years to get Argentina to pay a 2001 bond it owes in full. Because it's recently won a court judgment saying that Argentina owes it money, it was able to get an injunction from the government of Ghana saying it's entitled to pay the ship.
Personally I find it a little strange that Ghana would pay attention to a foreign court order, and that they would seize a military vessel.  Even an unarmed, sailing-training vessel.  The potential for this to get out of hand quickly.  Ghana's navy is mostly old (very old) U.S. Coast Guard vessels. Presumably they would rely on the French for help if an Argentinian sub parks itself outside the harbor and says nobody leaves until we get our boat back, but can you imagine the French wanting to come to the aid of a U.S. Hedge fund? 
ARA Libertad in happier days (Wikipedia commons)


PioneerPreppy said...

Heh Guess that hedge fund was invested heavily in Ghana?

russell1200 said...

Who knows? Ghana's corruption index is about the same as Italy. This goes a little beyond paying of a traffic ticket.

At the moment they are waiting on a ruling of Ghana's Supreme Court.