Cuba Creditor Hires Lawyer Who Won Argentina Debt Settlement

(Bloomberg) -- An investment fund that’s seeking a payout from the Cuban government on more than $1.3 billion in defaulted debt and back interest has hired the lawyer who won a settlement for hedge funds in a long-running legal battle against Argentina.

CRF I Ltd. contracted Matthew McGill, a partner with Gibson, Dunn & Crutcher, to represent it in its claim against Cuba “including potential litigation,” according to a letter from the firm provided to Bloomberg News by a fund investor. McGill will be joined by Charles Falconer, the former British secretary of State for Justice, according to the letter.

CRF is the largest debt holder in the London Club, a group of creditors with a total of more than $5 billion in defaulted commercial debt and back interest. The debt dates back to the 1970s and 1980s and trades at about 23 to 24 cents on the dollar, according to the creditors. The Cuban government has said it intends to clear such obligations as it seeks a return to international capital markets.

Cuba’s former President Raul Castro negotiated a settlement of $11.1 billion in sovereign debt to the Paris Club of creditors, which forgave all but $2.6 billion. The London Club -- which includes CRF, Stancroft Trust Ltd, Adelante Exotic Debt Fund Ltd, and a commercial bank -- also offered to restructure the loans earlier this year but withdrew the proposal when Cuba failed to respond.

“I want to believe that there’s still appetite for an amicable settlement,” said Rodrigo Olivares-Caminal, a law professor at Queen Mary University in London who represents the London Club. “The members are not aggressive creditors seeking an absolute return, but they hold legally binding claims that were entered into by Cuba.”

A spokesman for CRF said the company wants to work with Cuba’s new government, under President Miguel Diaz-Canel, “to resolve issues so Cuba can return to the international markets.”

McGill and the Cuba Finance Ministry didn’t reply to emails seeking comment.

McGill represented NML Capital Ltd for more than 10 years as it sought to recover on defaulted sovereign bonds from Argentina. After winning a case before the U.S. Supreme Court, NML and other hedge funds settled with Argentina for $4.65 billion. More recently, McGill represented funds that hold Puerto Rican municipal debt in a case that was heard by the Supreme Court in March.

©2018 Bloomberg L.P.